Microsoft to Pause Hiring in US Consulting Division, Citing Cost-Cutting Measures
Satya Nadella, Executive Chair and CEO of Microsoft Corporation, speaks at the “Microsoft Build: AI Day” event in Jakarta, Indonesia, on April 30, 2024. Ajeng Dinar Ulfiana | Reuters
Microsoft plans to pause hiring in part of its consulting business in the US, according to an internal memo. The move is aimed at reigning in expenses, a week after the company announced plans to lay off some employees, affecting less than 1% of its workforce. The cost-cutting measures are intended to align with a policy by the Microsoft Customer and Partner Solutions organization, which employs around 60,000 people.
To reduce costs, the consulting division will hold off on hiring new employees and back-filling roles, according to the memo. The group will also slash its marketing and nonbillable external resource spend by 35%. Additionally, employees are instructed not to expense travel for internal meetings, instead opting for remote sessions. Executives will need to obtain authorization to travel to customers’ sites to ensure spending is justified.
The consulting division has grown more slowly than Microsoft’s productivity software subscriptions and Azure cloud computing businesses. The unit generated $1.9 billion in the September quarter, down about 1% from the same period last year, compared to a 33% increase in Azure.
This news comes after Microsoft’s early 2023 layoffs of 10,000 employees and lease consolidation, and January 2024’s 1,900 gaming unit job cuts to reduce overlap. Despite the cost-cutting measures, Microsoft’s shares increased 12% in 2024, outpacing the Nasdaq Composite’s 29% boost.