Microsoft reports 12% drop in profit amid layoffs
- ByStartupStory | January 25, 2023
Microsoft reported a 12% drop in profit for the October-December quarter, citing economic uncertainty as the reason for its decision to lay off 10,000 employees.
The company earned $16.43 billion in quarterly profit, or $2.20 per share.
Excluding one-time items, the Redmond, Washington-based company reported earnings of $2.32 per share, exceeding Wall Street’s forecast of $2.29 per share.
The software company reported revenue of $52.75 billion in its second fiscal quarter, October-December, up 2% from the same period a year ago.
Microsoft announced last week that it would lay off nearly 5% of its global workforce due to macroeconomic conditions and shifting customer priorities.
It is one of several tech companies to announce mass layoffs, including Google, Amazon, Salesforce, and Facebook parent Meta.
Microsoft’s personal computing business, which is centred on its Windows software, was widely expected to continue a decline that began earlier this year as a result of economic uncertainty and sluggish demand.
The company earns licencing fees from PC manufacturers who include the Windows operating system in their products.
Gartner, a market research firm, reported that worldwide PC shipments fell 28.5% from the same period in 2021, the steepest quarterly decline since Gartner began tracking the market in the 1990s.
“Among the factors reducing consumer demand for PCs were increased inflation, higher interest rates, the expectation of a global recession and the fact that many people already bought new computers during the COVID-19 pandemic,” Gartner said.
Microsoft announced on Monday a multiyear, multibillion-dollar investment in the artificial intelligence startup OpenAI, maker of ChatGPT and other tools that can write readable text and computer code and generate new images, in an effort to further integrate the latest advances in artificial technology into its products.
Also Read
Follow Startup Story
Related Posts
