Depends. If the hiring manager knows you, knows your work, and your current job is obviously well-aligned with the new position, you can probably skip the cover letter. The hiring manager might or might not take the time to connect the dots, so you have to connect the dots for them - which is what the cover letter does. Regardless, I would reach out to the hiring manager. I've brought internal candidates who didn't reach out (directly or through a mutual contact) for interviews, but have never actually hired one of them. The people who reach out have a better idea of what I'm looking for and present better during the interviews. I would respond to external candidates similarly, but I'm in a niche field in a small market, so it's rare that I get an external candidate for my open positions.
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