Microsoft asks staff to cut expenses on travel, training

Another sign of the coming global recession

In an attempt to keep costs in check, Microsoft is asking staff to spend less on items like travel, training and business gatherings.

The Wall Street Journal reported this week that managers have told employees about budget cuts at the company.

For instance, managers paid for the food and drinks at a recent picnic for one team out of their own pocket, something the company would have done in the past.

A Microsoft spokesperson cited statements by Microsoft's chief financial officer, Amy Hood, during the company's fiscal fourth-quarter results conference call last month.

"As we manage through this period, we will continue to invest in future growth while maintaining intense focus on operational excellence and execution discipline." Hood said at the time.

People inside the company told the WSJ that Hood also emphasised the point during an internal meeting recently, and urged staff to exercise restraint while spending Microsoft's money.

Microsoft has also been exploring other cost-cutting measures. It recently made a round of layoffs and has also scrapped many of its open positions.

The company is cutting staff in its Modern Life Experiences (MLX) department, which aids in the creation of software products for customers. Microsoft has allegedly axed 200 workers from the MLX unit as part of its restructuring effort, giving them the option of accepting a different, lower-paying job or quitting with a severance payment.

Microsoft's most recent quarter saw a 12% increase in sales to $51.9 billion and a 2% increase in earnings to $16.6 billion, both of which fell short of Wall Street projections. These were the combined consequences of a strong dollar, lower videogame sales post-lockdowns, and a slowdown in the company's cloud business.

CEO Satya Nadella said on an earnings call last month that the company's IT expenditure is going to increase because "every business is trying to fortify itself with digital tech to in some sense navigate this macro environment."

Many IT firms are currently trying to keep expenses under control to adjust to rising inflation, fears about economic growth, and a slowdown in advertising spending.

Between June and July, US job posting in tech hotspots like Austin and San Francisco plummeted by 8.4%, while this Spring the number of jobs mentioning 'metaversefell more than 80%.

Oracle started firing hundreds of workers last week, while Robinhood Markets said it was cutting nearly a quarter of its full-time workforce.

Netflix, which fired 150 employees in May, said in June that it would be cutting roughly another 300 jobs.

Apple has said that it would be 'more deliberate' in hiring.

Many of leading tech firms that rely heavily on ad income have fared particularly poorly.

Facebook owner Meta, recently lowered its goal for recruiting engineers in 2022 to 6,000 - 7,000, down from an early aim of 10,000, and said it would increase its expectation of existing employees in the hope some would resign.