Microsoft denies hiring freeze

Company says it's re-evaluating some projects in wake of weaker economy

Microsoft Corp. today denied that it has instituted a hiring freeze, despite an internal memo described by an employee indicating the move.

"It is not true that we have instituted a hiring freeze," said Lou Gellos, a Microsoft spokesman. "What is true is that we are evaluating hiring as we always do and we might make projections that are different than perhaps we had at the beginning of the year."

Some employees reportedly received a note saying that the company was re-evaluating its staffing levels and wouldn't be expanding its head count.

But Gellos said the company intends to continue hiring new workers. "This year, we expect lots of growth and that we will hire lots of people," he said. "I think the nuance is in the fact that, in light of the economy, it's important that we do the prudent thing and evaluate projects that we're working on."

Gellos said he was unaware of a companywide memo to employees about hiring changes, but he said that individual divisions might have sent letters to workers.

A re-evaluation of hiring plans could be a sign that the financial crisis in the U.S. is taking a toll on the IT sector. Analysts this week downgraded the stock and earnings expectations for a variety of IT vendors, including Apple Inc., Salesforce.com Inc., Intel Corp. and AT&T Inc. Some analysts say that the financial crisis is causing a credit crunch that will likely slow IT spending by individual consumers and companies alike.

Microsoft has more than 91,000 employees worldwide, including more than 54,000 in the U.S. The software developer has seldom had layoffs or slowed hiring in its more-than-30-year history.

The news follows Microsoft CEO Steve Ballmer's announcement in Europe this week that the company plans to hire additional engineers in Norway and other European locations to further the company's development of search technology.

Copyright © 2008 IDG Communications, Inc.

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