Microsoft exec tells employees in Windows and Office groups to be more cautious in hiring

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  • As the economic situation continues to strengthen, Microsoft in charge of Office is asking executive employees to be more cautious when it comes to opening up new roles.
  • Microsoft’s Office and Windows businesses are growing, but they’re not keeping pace with the Azure cloud business.
  • Two weeks ago Microsoft told employees it would increase their compensation share.

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Microsoft is gearing up to take a more conservative approach to hiring in a part of the business that includes some of its most popular products.

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According to an acquaintance, Rajesh Jha, executive vice president of Office and part of Windows, told his group employees on Thursday to be more cautious when opening new roles and requesting permission from Jha’s leadership team first. In this case, those who were not authorized to speak about the private deliberations. bloomberg First notified on change.

The move comes a month before Microsoft begins its new fiscal year, a time when the company regularly undergoes restructuring. Broadly speaking, Microsoft and other companies in the tech industry are recalculating the first half of the year as a disastrous approach to market close and inflationary pressures continuing to mount.

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Facebook parent Meta, chipmaker Nvidia and social media company Snap have announced plans for less strict hiring in recent weeks, as the Covid-19 pandemic and the war in Ukraine put upward pressure on prices and the rest of the world. approach has been reduced. Year.

When asked about the memo, a Microsoft representative sent the following statement:

“As Microsoft gears up for the new fiscal year, it is making sure the right resources are aligned with the right opportunity. Microsoft will continue to grow headcount in the coming year and it will put additional focus on those resources where they go. Huh.”

Microsoft is still focused on retaining top talent in the tight labor market. CEO Satya Nadella announced two weeks ago that the company was increasing the funds available for qualification enhancement for employees.

While Microsoft’s share has risen with the rest of the market this year, it pales in comparison to companies such as Google, Facebook and Amazon, which have greater exposure to consumer activity and spending.

However, companies that rely on business spending still face risks as customers tighten their budgets. According to estimates by RBC Capital Markets, approximately 88% of Microsoft’s quarterly Office revenue of approximately $11 billion is commercial in nature. 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.

Microsoft’s finance chief Amy Hood 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 to device makers from Windows license sales should be in the low to mid-single digits in the second quarter, thanks to the PC market led by sales of commercial machines. This would be less than the 11% increase in the previous quarter.

“We expect Office 365 revenue growth to be down a point or two sequentially on a constant-currency basis,” Hood said.

Microsoft still has room to sell clients on Office enhancements as the Team Chat app brought in new users during the pandemic, and Microsoft has security features some of them may want to add. Speaking at a conference this week with Mark Murphy, an analyst at JPMorgan Securities, Jha said the company is still making its efforts to get customers to sign up for the more expensive E5 Office subscription tier.

watch: Microsoft’s Metaverse hits the factory floor

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