Layoffs have dominated headlines in recent months as companies ramp up spending on artificial intelligence. Large tech firms, in particular, have been trimming their workforce in waves as they recalibrate priorities. Now, another cost-control approach is taking shape. Microsoft is putting a pause on hiring across several teams, a move aimed at keeping expenses in check even as it continues to channel significant investment into AI.
According to a report by The Information, Microsoft has asked managers in several key divisions, including its cloud business and North American sales teams, to hold off on new hiring.
The pause appears to affect fresh candidates who have not yet secured formal offers. The move reflects a broader effort to rein in costs and safeguard margins as the company nears the close of its financial year in June, even as it continues to prioritize spending on AI.
The hiring slowdown is not uniform across the company. Microsoft continues to recruit in select areas, particularly in teams focused on AI-driven products such as Copilot. The approach underscores a clear shift in priorities, where hiring is being tightened in some parts of the business while roles tied to AI development remain firmly in focus.
The move follows a year marked by significant workforce reductions. In 2025, Microsoft cut more than 15,000 jobs, including about 6,000 layoffs announced in May, as part of a broader effort to control costs while stepping up investment in AI infrastructure.
CEO Satya Nadella had earlier addressed the situation, acknowledging its toll on employees. “Before anything else, I want to speak to what’s been weighing heavily on me, and what I know many of you are thinking about: the recent job eliminations,” Nadella said. “We must reimagine our mission for a new era It’s about building tools that empower everyone to create their own tools. That is the shift we are driving — from a software factory to an intelligence engine.”
Microsoft’s deeper push into AI has also meant a sharp rise in spending, especially on infrastructure. In its latest quarterly results, the company flagged a slowdown in cloud growth even as capital expenditure climbed to record highs, putting greater pressure on keeping costs under control.
At the same time, AI is beginning to deliver efficiency gains across parts of the business. A 2025 Bloomberg report noted that Microsoft saved over $500 million in its call centre operations by deploying AI tools. These tools are now being used more widely across functions, including customer support, sales, and software development.