The overhaul is to do away with numerous redundancies and drive more efficiency, the source said.
One Microsoft analyst tells KOMO News the writing on the wall has been there a long time when it comes to effectively marketing its consumer products, like the Windows Phone.
"It doesn't surprise me, given we've always talked about Microsoft overspending," said Sid Parakh. "The company's probably known that and they're at a point where they're actually acting on it."
It's not clear how many jobs will be cut but most are expected at the Redmond campus.
A Microsoft spokesperson says the company is taking steps to improve its marketing effectiveness which includes a reduction of marketing positions.
It was back in early 2009 Microsoft issued its first ever layoffs, shedding 5,000 jobs due to the economic downturn.