May 31, 2022: -Microsoft is gearing up to get a more conservative approach which hires in a part of the business, including some of its most popular products. On Thursday, Rajesh Jha, the executive vice president in charge of Office and part of Windows, told staffers in his group to be more cautious when it comes to opening up roles and to request permission from Jha’s leadership team first, according to a spokesperson, authorizing to speak about private deliberations.

The move comes a month before Microsoft starts its latest fiscal year, a time when the company regularly reorganizes. More broadly, Microsoft and different companies across the tech industry are recalibrating as a catastrophe for the market nears a close, and inflationary pressures continue to mount.

Facebook parent Meta, chipmaker Nvidia and social media company Snap have announced plans in the previous weeks to hire less vigorously, as the Covid-19 pandemic and the war in Ukraine have added to the upward pressure on prices and dampened the outlook for the rest of the year.

“As Microsoft gets ready for the recent financial year, it makes sure the right resources align with the right opportunity. Microsoft continues to increase headcount in the year ahead, and it will add additional focus to where those resources go.”

Microsoft is focusing on retaining top talent in a stiff labor market. Two weeks ago, CEO Satya Nadella announced that the company is increasing the amount of money available for merit increases for employees.

While Microsoft’s stock is hammered this year and the rest of the market, it’s held up better than companies such as Alphabet, Meta Platforms, and Amazon, which have exposure to consumer activity and spending.

Although, companies reliant on business spending still face risks as clients tighten their budgets. According to estimates from RBC Capital Markets, almost 88% of Microsoft’s roughly $11 billion in quarterly Office revenue is commercial. Office and Windows are still growing, but not as fast as Microsoft’s Azure public cloud business, second to Amazon Web Services in cloud infrastructure.

Office and Windows are continuing to increase in the current quarter, albeit at a little slower speed, Microsoft’s finance chief, Amy Hood, told analysts in the previous month.

Revenue from Windows license sales to device makers should be in the low to mid-single digits in the second quarter, which is thanking a PC market led by sales of commercial machines, Hood said. That would be less than 11% growth in the prior quarter.

“We expect Office 365 revenue growth to be lower by a point or two on a constant-currency basis,” Hood said.