The second quarter corporate earnings season is in full swing. And Big Tech, wanting to avoid any unpleasant surprises, is not waiting to tell investors how a sharp economic slowdown could affect its performance in the coming months.
The tech industry also seems to indicate that it is not overly optimistic about the state of the economy.
“We will slow down the pace of hiring for the rest of the year, while continuing to support our biggest opportunities,” Google (GOOGLE) – Get the report from Alphabet Inc. CEO Sundar Pichai wrote in a memo to employees on July 12.
“For the remainder of 2022 and 2023, we will focus our hiring on critical engineering, technical and other roles, and ensure that the great talent we hire is aligned with our long-term priorities.”
Google pauses hiring
The CEO added that Google needed to be “more entrepreneurial, work with greater urgency, sharper focus and hungrier than we’ve shown on the sunniest of days.
“In some cases, that means consolidating where investments overlap and streamlining processes. In other cases, that means pausing development and redeploying resources to higher priority areas.
“Making the company more efficient is up to all of us – we will create more ways for everyone to participate and share ideas to help, so stay tuned,” added Pichai.
Just days after this memo, Google sent out a worrying new warning: The Mountain View, California-based search, advertising, and cloud company will immediately suspend hiring for two weeks, according to Information.
The company went from slowing hiring for the rest of the year to suspending them, at least temporarily.
“We will use this time to review our staffing needs and align with a new set of prioritized staffing requests for the next three months,” Prabhakar Raghavan, Google’s senior vice president, wrote in an internal memo reviewed by The Information.
The hiring pause would not affect offers that had already been made to applicants, but the company will not make new offers until the pause ends.
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Google did not immediately respond to a request for comment.
Microsoft removes open jobs
Microsoft (MSFT) – Get the Microsoft Corporation report has decided to eliminate many vacant positions, a spokeswoman told TheStreet, confirming information from Bloomberg News.
Key divisions such as the cloud business, Azure and the security software unit, which are seen as two key growth areas for the Redmond, Wash.-based software giant, are affected by the removal of job postings.
The company will also not terminate job offers that have already been made and will make exceptions for some critical jobs.
“As Microsoft prepares for the new fiscal year, it is ensuring that the right resources are aligned with the right opportunity,” the spokesperson said in an emailed statement. “Microsoft will continue to increase its headcount in the coming year and we will add additional focus to where those resources go.”
In May, MSFT had decided to take a more cautious approach to recruiting, particularly in the Windows, Office, and Teams pools.
Earlier this month, the company cut a small number of jobs as part of a realignment but said it would continue to increase its workforce. The job cuts affected less than 1% of the company’s 181,000 employees, including people working in consulting and client solutions.
The elimination of vacancies in Azure and in the security division is surprising. Azure competes with Amazon (AMZN) – Get the report from Amazon.com Inc. Web services, which leads the race among cloud infrastructure providers. Azure is trying to bridge the gap with AWS and must, at the same time, counter Google Cloud’s offensive.
As for the security division, it is in a sector that has seen cyberattacks multiply and become more sophisticated. Microsoft is also in high demand since the Russian war in Ukraine.
It should be remembered, however, that the month of July, specifically July 1, marks the beginning of a new fiscal year for Microsoft. The month is traditionally marked by job cuts and staff adjustments, so staffing is in line with the sectors in which the company wants to invest.
In addition to Google and Microsoft, Apple (AAPL) – Get the report from Apple Inc. and Metaplatforms (GOAL) – Get the report from Meta Platforms Inc.matrix of Facebook, Instagram and WhatsApp, measures have also been taken recently to reduce hiring in anticipation of a possible recession.