Microsoft slows some hiring for Windows, Teams, and Office

'Making sure the right resources are aligned to the right opportunity' ahead of next fiscal year

Microsoft has hit the brakes on hiring in some key product areas as the company prepares for the next fiscal year and all that might bring.

According to reports in the Bloomberg, the unit that develops Windows, Office, and Teams is affected and while headcount remains expected to grow, new hires in that division must first be approved by bosses.

During a talk this week at JP Morgan's Technology, Media and Communications Conference, Rajesh Jha, executive VP for the Office Product Group, noted that within three years he expected approximately two-thirds of CIOs to standardize on Microsoft Teams. 1.4 billion PCs were running Windows. He also remarked: "We have lots of room here to grow the seats with Office 365."

But not enough room to grow the headcount. At least not without upper management signing off on the hires first, according to emails seen by employees.

The move follows plans to fiddle with employee compensation in what has become a highly competitive market. A memo from Microsoft CEO Satya Nadella, a copy of which was obtained by Geekwire, revealed plans for a near-doubling of the global merit budget and a jump in stock-based compensation as the company looked to fight off threats from other tech giants in the recruitment space.

"As Microsoft gets ready for the new fiscal year, it is making sure the right resources are aligned to the right opportunity," a Microsoft spokeswoman told us.

Microsoft's last earnings release for Q3 2022 showed an 18 percent year-on-year jump in revenue to $49.4 billion, including an 11 percent increase in Personal Computing to $14.5 billion. However, the global economic landscape for the next fiscal year is uncertain, hence the more cautious approach to hiring.

Other divisions are unaffected and a company spokesperson told The Reg: "Microsoft will continue to grow headcount in the year ahead and it will add additional focus to where those resources go."

Microsoft isn't alone in taking a more discerning approach to hiring. During a call with analysts this week, Nvidia CFO Colette Kress said that, following success in hiring earlier in the year, the process was "now slowing to integrate these new employees."

"This also enables us to focus our budget on taking care of our existing employees as inflation persists," she added. ®

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