Tech giant Microsoft (MSFT) is set to freeze hiring in its U.S. consulting division as part of a larger plan to reduce costs, CNBC reported. The company also plans to cut the division’s marketing and non-billable external resource spending by 35% to make operations more efficient.
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It’s worth noting that the consulting division has grown more slowly than Microsoft’s productivity software and Azure cloud businesses. In the September quarter, the consulting unit brought in $1.9 billion, down 1% from the previous year, while Azure grew by 33%.
These cuts follow Microsoft’s recent announcement of job layoffs, which will affect less than 1% of its workforce, according to a source familiar with the company’s plans.
MSFT Prioritizes AI Investments
Earlier this month, Microsoft revealed plans to invest approximately $80 billion in fiscal 2025 to handle advanced artificial intelligence (AI) workloads.
Microsoft has already invested over $10 billion in OpenAI and added ChatGPT to its products, like the Bing online search engine. The company also plans to restart the Three Mile Island nuclear plant in Pennsylvania to use its energy for AI data centers.
These investments highlight Microsoft’s focus on using resources to support its key goals, especially in the fast-growing AI field.
Is MSFT Stock a Buy?
The stock of Microsoft has a consensus Strong Buy rating among 28 Wall Street analysts. That rating is based on 26 Buy and two Hold recommendations issued in the last three months. The average price target on MSFT stock of $506.96 implies 21.96% upside from current levels.
