Microsoft Tightens Belt, Pauses Hiring in US Consulting Division
As the tech giant continues to navigate the current economic landscape, Microsoft has announced plans to pause hiring in its US consulting business, according to an internal memo. This move is part of the company’s ongoing efforts to rein in expenses and optimize resources.
Cost-Cutting Measures
The consulting division, which is part of the Microsoft Customer and Partner Solutions organization, will implement several cost-cutting measures to align with the company’s fiscal year 2025 goals. These measures include:
- A hiring freeze, with no new employees to be added to the team
- No back-filling of roles, to reduce overhead costs
- A ban on expensing travel for internal meetings, with remote sessions encouraged instead
- Executive authorization required for customer site visits, to ensure targeted spending
- A 35% reduction in marketing and non-billable external resource spend
Aligning with Business Goals
The consulting division has experienced slower growth compared to Microsoft’s productivity software subscriptions and Azure cloud computing businesses. By implementing these cost-cutting measures, the company aims to refocus resources on high-growth areas and optimize its consulting business for long-term success.
A Broader Trend
This move is part of a larger trend at Microsoft, which has been actively managing costs and streamlining operations under the leadership of CEO Satya Nadella. In recent years, the company has laid off employees, consolidated leases, and reduced overlap in its gaming unit following the acquisition of Activision Blizzard.
A Focus on Artificial Intelligence
Despite these cost-cutting measures, Microsoft remains committed to investing in its artificial intelligence efforts. The company plans to spend $80 billion on AI development this year, a move that could potentially drive growth and boost its stock price. With careful management of costs and a focus on strategic investments, Microsoft is poised to navigate the current economic landscape and emerge stronger in the long run.
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