“While we manage this period, we will continue to invest in future growth while maintaining a high focus on operational excellence and executive discipline.”- Amy hood, chief financial officer of Microsoft, July 2022.
“If we have a choice, we prefer shrimp to shrimp.”- In May 1993, Mike Murray, then the human resources director of Microsoft.
The two comments made by Microsoft leaders are nearly 30 years apart. There are two different ways of communication, but the message behind them is the same: people, save as much as possible.
According to a report in the Wall Street Journal this morning, Microsoft is “asking all teams of the company to control some employee expenses”, such as business trips and parties. The report cites a recent picnic by a Microsoft team as an example, where managers paid for food and drinks themselves instead of spending money.
Hood’s comments came from Microsoft’s fourth quarter earnings conference call, explaining the company’s approach to financial analysts. Company insiders said that she reiterated this point at an internal meeting at the beginning of this fiscal year and asked employees to think twice before spending Microsoft’s money.
This report reminds people of the legendary “shrimp vs. Winnie” memo of Microsoft in the past.
Fast forward to mid-2022, which is the latest example of technology companies wishing to control their spending in the face of economic uncertainty, as they are preparing for a possible recession or financial recession.
Microsoft made a round of layoffs at the beginning of this fiscal year and cancelled many vacant positions. As part of the retrenchment, the company also reportedly cut its modern life experience (MLX) group.
The MLX group includes Microsoft’s family safety parental control system, which was reportedly hit by layoffs, but ZDNet’s Mary Jo Foley reported that Microsoft did not suspend the service.
Before the layoffs, the company added a record 40000 new employees in the latest fiscal year. Hood told analysts on a conference call that 11000 employees will be recruited in the first quarter, mainly engaged in cloud engineering, LinkedIn, customer deployment and commercial sales. In addition, however, growth is expected to slow significantly.
Microsoft’s revenue in the latest quarter increased by 12% to $51.9 billion, and its profit increased by 2% to $16.6 billion. Both of these financial indicators failed to meet the expectations of Wall Street.