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October 3, 2008 1:38 PM

UPDATE: Microsoft denies hiring freeze, but confirms "adjustments" coming

Posted by Brier Dudley

After hearing from multiple sources that there's a hiring freeze in at least some groups at Microsoft, I asked for an official statement.

Spokesman Lou Gellos said there's no freeze but the company is "re-evaluating" employment levels -- a normal process, he said.

"Every year we always take a look at our hiring situation, we review things on a regular basis and we're gong through that process right now,'' he said.

So there's no hiring freeze? "Not that I'm aware."

"I don't know of any group that's in the middle of a hiring freeze. From a company sense, we're just doing the prudent thing -- re-evaluating, which we would do anyway."

Maybe this is semantics. Microsoft is apparently taking some sort of pause to examine spending, which is inevitable given the economy. During such a pause, hiring is likely to slow or stop. Freeze may be too strong a word, but something's happening.

Gellos just issued a formal statement:

"Microsoft will continue to grow and add thousands of new jobs this year, but given the current economic environment we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate. We are optimistic about our prospects for growth and will continue hiring the talent we need to ensure our ongoing success."

Gellos said, "We're hiring lots of people and we will this year" but couldn't specify headcount growth. As of June 30, the company employed 91,259 people globally, including 39,311 in the state.

Still, we've heard from several employees that there's a freeze.

Anyone care to share more details?

Not the best story to report during an economic downturn. If Microsoft hiring slows significantly, it will hurt the Puget Sound region.

It's inevitable that Microsoft and other big companies will slow their growth as the economy and tech spending slows.

Tighter controls on budgeting were also foreshadowed at July's analyst meeting, before the economy really turned south.

In response to concerns Wall Street had about expenses reported in Microsoft's fiscal fourth quarter, CFO Chris Liddell explained how the budgeting process results in some groups underspending in some quarters. In the fourth quarter, they spent their budgets, so it looked like a jump.

After that experience, Microsoft's probably being especially conservative with budgeting, particularly with growth slowing and exchange rate challenges.

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