Microsoft cuts hiring as economic woes hit more of the tech industry

Satya Nadella, CEO of Microsoft Corp., speaks at a panel session at the World Economic Forum in Davos, Switzerland on May 24, 2022.

Holly Adams | Bloomberg | Getty Images

Microsoft said it would slow down its hiring rate given the current economic conditions following similar announcements from its technical colleagues.

“As Microsoft prepares for the new fiscal year, it’s making sure the right resources match the right capabilities,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “Microsoft will continue to increase headcount in the coming year, and we will be paying more attention to where those resources go.”

Microsoft shares fell 1% in extended trading after an initial report from bloombergwhich said the software company was getting rid of job listings.

Alphabet, Meta and reportedly Apple made a commitment to slow down the recruitment of new employees. This follows years of expansion as investors rewarded revenue growth and market share gains. With inflation at its highest level in four decades and recession fears on the horizon, companies are becoming more conservative.

While Microsoft sells software to corporations, schools and governments, some businesses may be more vulnerable to slowdowns. These areas include LinkedIn, the Xbox gaming division, and advertising.

In March, Rajesh Jha, chief executive responsible for Office software and part of the Windows operating system, told his organization exercise caution when opening new roles and obtain prior approval from their leadership team. Earlier this month Microsoft cut a small percentage employees in different groups.

In June, Microsoft reduced its quarterly earnings and earnings estimates, the adjustment, according to the company, was due to changes in foreign exchange rates. Microsoft reports fourth fiscal quarter earnings on July 26.

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