Microsoft takes a cautious approach to hiring in Office and Windows
Satya Nadella, CEO of Microsoft Corp. , appears at a panel discussion at the World Economic Forum in Davos, Switzerland, on May 24, 2022.
Holly Adams | Bloomberg | Getty Images
Microsoft is preparing for a more conservative approach to hiring a part of the business that includes some of its most popular products.
Rajesh Jha, executive vice president in charge of Office and part of Windows, told employees in his group on Thursday to be extra cautious when it comes to opening up new roles and asking permission from Jha’s leadership team first, according to a familiar person. matter, who was not authorized to speak of private deliberations. Bloomberg reported about the change earlier.
The move comes a month before Microsoft begins its new fiscal year, a time when the company regularly reorganizes itself. More broadly, Microsoft and other companies across the tech industry are recalibrating as the first half of a disastrous year approaches for the market, and inflationary pressures continue to build.
Facebook parent Meta, chipmaker Nvidia and social media company Snap have announced plans in recent weeks to hire less aggressively, as the Covid-19 pandemic and the war in Ukraine put upward pressure on prices and dampen expectations for the rest of the countries. public.
When asked about the memo, a Microsoft representative sent the following statement:
“As Microsoft prepares for the new fiscal year, it is making sure that the right resources align with the right opportunity. Microsoft will continue to grow staff in the coming year and will add extra focus to where those resources are going.”
Microsoft remains focused on retaining the best talent in a tough job market. CEO Satya Nadella announced two weeks ago that the company is increasing the amount of funds available to increase employee merit.
Although Microsoft stock has taken a big hit this year along with the rest of the market, it has held up better than companies like Google, Facebook and Amazon, which have more exposure to consumer activity and spending.
However, businesses that rely on business spending still face risks as customers tighten their budgets. Roughly 88% of Microsoft’s nearly $11 billion in quarterly revenue is commercial in nature, according to RBC Capital Markets estimates. Office and Windows are still growing, but not as fast as Microsoft’s Azure public cloud business, which is second only to Amazon Web Services in cloud infrastructure.
Amy Hood, Microsoft’s chief financial officer, told analysts last month that Office and Windows should continue to grow in the current quarter, albeit at a slightly slower pace.
Hood said revenue from Windows licensing sales to hardware makers should be in the low to mid single digits in the second quarter, thanks to the PC market led by commercial machine sales. This would be down from 11% growth in the previous quarter.
“We expect Office 365 revenue growth to decline sequentially by a point or two on a constant currency basis,” Hood said.
Microsoft still has room to sell customers on Office improvements in part because the Teams chat app has brought in new users during the pandemic, and Microsoft has security features some of them might want to add. Speaking at a conference this week with Mark Murphy, an analyst at JPMorgan Securities, Jha said the company is still early in its efforts to enroll customers in the more expensive E5 Office subscription category.
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