Microsoft Confirms Open Jobs Cut In Azure, Security

July 21, 2022, 01:31 PM EDT

‘As Microsoft prepares for the new fiscal year, it is ensuring that the right resources are aligned at the right time,’ according to the statement.

Microsoft confirmed to CRN that it has cut open jobs in its Azure, security and other business segments.

In a statement, a Microsoft spokesperson said the company still expects to grow its total number as it aligns resources. The Redmond, Wash.-based tech giant’s fiscal 2023 fiscal year began July 1. Fourth-quarter and fiscal year 2022 earnings are expected on Tuesday.

“As Microsoft prepares for the new fiscal year, it is ensuring that the right resources are aligned at the right time,” according to the statement. “Microsoft’s numbers will continue to grow over the next year, and we’ll be adding more focus on where those resources are going.”

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Did Microsoft Cut Jobs?

A Microsoft spokesperson also confirmed details in a Bloomberg article on Wednesday that said open Azure and security jobs have been cut.

The news comes at Microsoft’s annual Inspire conference aimed at partners. The event was held online this year as the world continues to grapple with COVID-19.

Despite the cuts, several Microsoft executives during the event highlighted opportunities for partners to sell customers the giant’s cloud and security offerings, telling partners that the company will make a push this year for cloud product packages focused on specific industries – such as health care and financial services.

Microsoft will honor job offers already made and is still hiring for critical jobs, according to Bloomberg. Microsoft in May announced slower hiring in its Windows, Office and Teams divisions.

Microsoft also confirmed layoffs in July. Microsoft employed about 181,000 people at the end of June 2021, according to a regulatory filing. The cuts hit less than 1 percent of the company.

Other tech companies have laid off employees amid concerns over a looming US recession and rising inflation. Boston-based Snyk cut about 30 employees from its workforce as part of its efforts to “navigate the coming economic headwinds” and ensure long-term growth.

Cybersecurity technology developer IronNet said in a recent regulatory filing that the company will lay off about 55 of its employees, or about 17 percent of its total headcount. Software developer OneTrust has reduced its headcount by about 950 people, or about 25 percent of the company.

Oracle recently considered cutting costs by up to $1 billion and as a result, could potentially lay off thousands of employees in August.

Morgan Stanley At Microsoft

A note on Thursday from investment bank Morgan Stanley said that despite PC shipments declining press results for Windows original equipment manufacturers (OEMs), foreign exchange headwinds and weakening consumer demand, “solid feedback on commercial business stability from our channel conversations and another set of impressive Microsoft-specific results from our most recent CIO survey … bolsters our confidence in ~70% of revenues (and ~80% of gross margins) that investors are most focused on to sustain Microsoft’s future growth.”

According to a Morgan Stanley and AlphaWise survey of chief information officers (CIOs), Microsoft is the most cited vendor for the expected largest increase in the incremental share of IT budgets due to the move to the cloud in 2022 compared to 2021. Microsoft was followed by Amazon, Google, Palo Alto Networks and ServiceNow.

The vendor expected to see the biggest loss of incremental IT budget share due to the move to the cloud is Hewlett Packard Enterprise, followed by Dell, IBM and Red Hat, Oracle and then VMware, according to Morgan Stanley.

Another survey by AlphaWise and Morgan Stanley ranked Microsoft as the vendor respondents use or are likely to use to manage hybrid cloud environments, a number that grew each quarter from the second quarter of 2021 to the second quarter of 2022.

Microsoft was followed by Amazon Web Services, VMware, Google and Red Hat.

Another Morgan Stanley note on Thursday put the chance of a recession in the next 12 months at 36 percent. The company expects to see more conservative views from dependent software vendors.

“Over the past several weeks, data points from our survey work and channel conversations have begun to show software demand is beginning to bow in the face of these rising macro headwinds,” according to the report by Morgan Stanley.

It continued: “We expect software companies to follow suit, and begin to include longer deal cycles on the back of minimal, otherwise flatly slowing demand, in addition to rising FX (foreign exchange) headwinds in forward outlooks as we go through the CY (calendar year) 2Q22 earnings season.”

Morgan Stanley put Microsoft on a list of software companies likely to protect free cash flow should the economy turn, along with Crowdstrike, Palo Alto Networks, Salesforce, ServiceNow, and others. Morgan Stanley put Atlassian, Datadog, MongoDB, Snowflake and others on a list of companies likely to perform best after a downturn.

“Despite macro weakness, Microsoft remains well-positioned to take advantage of public cloud adoption, large distribution channels, and broad installed customer base,” according to Morgan Stanley. “This should lead to a topline growth in the low to mid-teens over the next few years.”