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Microsoft closes unfilled job openings in cloud and security

Despite growth and strong demand in these areas, Redmond keeps trimming investment

Even Microsoft's rapidly growing cloud business and the strategically important area of security are not immune to cooling economic conditions with previous job openings said to have now closed unfilled.

In May, the Redmond-based business hit the brakes on hiring in several software and collaboration product areas including Windows, Office, and Teams. This was, Microsoft said at the time, merely preparation for the new financial year starting in July and to align resources with opportunities.

Just last week Microsoft decided to layoff less than 1 percent of its 180,000-strong workforce in different geographies and business units. This was described by the company as the annual summer clean-out based on "business priorities."

Now, the prudence has spread to areas beyond the expected. The cloud and security elements of Microsoft are next for trimming, according to a report by Bloomberg. The slowdown in hiring was conveyed to affected teams by their leaders this week.

"As Microsoft gets ready for a new fiscal year, it is making sure the right resources are aligned to the right opportunity," a spokesperson said. "Microsoft will continue to grow headcount in the year ahead, and we will add additional focus to where those resources go."

The PC industry has slowed in the first half of 2022, with a double-digit decline recorded for Q2, the steepest drop recorded in nine years following rapidly expanding sales during the pandemic. Pausing hires in the area of operating systems and productivity software is perhaps understandable.

Quite why Microsoft is clipping recruitment plans in its cloud division is another matter. The Intelligent Cloud division was up 26 percent year-on-year to $19.1 billion in Microsoft's Q3 ended March 31. Profit from operations bounced almost 29 percent to $8.2812 billion.

For the nine months of fiscal 2022, Intelligent Cloud grew to $55.343 billion, up 27 percent – the biggest single business unit at Microsoft. Operating profit was $24 billion, up from $18.3 billion in the same period of the prior financial year.

According to Gartner, Microsoft turned over $21.7 billion in the cloud infrastructure and platform service market in 2021, behind AWS, which brought in $41.697 billion. In SaaS, Microsoft generated $16.643 billion in revenues versus Salesforce in second with $13.5 billion.

Microsoft will host its Q4 earnings call on July 26 when no doubt financial analysts will be keen to hear CEO Satya Nadella talk about any, er, clouds he may or may not see on the horizon.

Inflation, the war in Ukraine, the ongoing pandemic, and other potential impediments to economic growth are paving way to concerns of a downturn, if not something more sustained.

This move taps into the hiring zeitgeist as of late. A number tech vendors have been exercising prudence on the hiring front, including Cisco, Google, Apple, Intel, and more. Parts of the technology industry experienced rapid growth in recent years but it seems some are cautiously feeling their way through the uncertainty. ®

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