The traditional “relationship man” of sale may be on the way to the AI era, said Jason Remkin, an investor at a software startup.
The VC said Microsoft's recent layoffs are upcoming layoffs.
Earlier this month, Microsoft began screening less than 4% of its many total sales rep workforce, or about 9,000 employees. That move reflects a wider change: salespeople relying on soft skills can quickly replace their products with solutions engineers who know the inside out, Lemkin said In an episode of the “20 Minute VC” podcast released on Thursday.
“My rough feeling is that 30% to 40% of 1-2 call salespeople will be replaced by AI,” he said.
Microsoft is running other companies He added that he's just thinking about it.
“In the age of AI, no one can't show up as big as you don't know our products,” Lemkin said. “There are solutions engineers who know this cold, have partners with someone, or are not selling well.”
“If you're a generalist sales person you consider to be the stakeholder today, you're better off worrying. That's the point of Microsoft,” he said.
Lemkin also said that AI has raised the standard due to customer expectations. The company “replaces people who don't know my product with people who do so,” he added.
Rory O'Driscoll, a longtime general partner at Scale Venture Partners, said in the episode that Microsoft's layoffs have not been assembled with a company replacing employees with AI.
“It was couched as a story that would “replace with better people,” he said. “It's difficult to discuss that.”
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“It's always impressive to me that these companies with a 40% operating margin are willing to grind out another point yet,” O'Driscoll said. “It's very capitalist.”
Lemkin and O'Driscoll did not respond to requests for comment from Business Insider. A Microsoft representative declined to comment.
Microsoft rewires Salesforce
Microsoft's latest layoffs are revising their strategy to sell AI tools amid increasing competition between Openai and Google, which is what will create the company.
The job targeted traditional salespeople who the company intends to replace with more technical salespeople, Business Insider learned earlier this month from sources familiar with plans and internal documents.
Microsoft has confirmed that it plans to replace several professional roles with solution engineers to deepen its technical and industry understanding between Salesforce and to hire more salespeople outside of its headquarters and attract more sellers on the field.
The company receives feedback from customers that they need to engage too many salespeople before they can reach technical details and demos. “Customers want Microsoft to take you to the technicians right away,” one of the people said. “We need more technical people much earlier in the cycle.”
In an internal note viewed by Business Insider, Microsoft sales chief Judson Althoff said he is improving his unit and focusing on AI.
