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Microsoft halts hiring in US consulting unit as cost-cutting measure

Microsoft is scaling back hiring in its U.S. consulting division to control costs while focusing on AI investments, according to an internal memo reported by CNBC.

Pedestrians walk past a Microsoft Experience Center, following a global IT outage, in New York City, U.S. July 19, 2024. REUTERS/Kent J. Edwards/File Photo

Microsoft is planning to halt hiring in part of its consulting business in the U.S. in a bid to cut costs, CNBC reported on Tuesday, citing an internal memo.

The tech giant is looking to manage overall expenses as it looks to continue investments in its artificial intelligence (AI) efforts.

Earlier this month, Microsoft said it planned to invest about $80 billion in fiscal 2025 on developing data centers to train AI models and deploy AI and cloud-based applications.

The consulting division will hold off on hiring new employees and back-filling roles to reduce costs, consulting executive Derek Danois told employees, as per the memo, CNBC reported.

Microsoft did not immediately respond to a Reuters request for comment.

Careful management of costs is of utmost importance, Danois wrote. The memo also instructs employees to not expense travel for any internal meetings and use remote sessions instead.

The changes by the U.S. consulting division are meant to align with a policy by the Microsoft Customer and Partner Solutions organization, which has about 60,000 employees, CNBC reported.

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The unit will also cut its marketing and non-billable external resource spend by 35%, the report said.