Microsoft Lost 12% of Its Profit

Microsoft reported a quarterly profit of $16.43 billion, or $2.20 per share.

Excluding one-time items, such as $800 million in severance payments to laid-off workers, Microsoft earned $2.32 per share, beating Wall Street expectations.

After the announcement of financial results, the company’s shares rose by more than four percent in extended trading.

From the beginning of October to the end of December, that is, in the second fiscal quarter, the software producer recorded revenue of 52.75 billion dollars, which is two percent more than the same period a year ago. Analysts surveyed by FactSet anticipated Microsoft to post an income of $52.99 billion for the quarter.

Last week, the technology giant cited “macroeconomic conditions and changing customer priorities” as the reason for laying off five percent of its employees.

Microsoft is one of some tech companies, including Google, Amazon, Salesforce, and Meta, to announce mass layoffs.

The company’s computer business was expected to continue its decline, driven by economic uncertainty and reduced demand earlier last year. Quarterly sales in this sector fell by 19 percent to $14.24 billion.

According to the Gartner company, which deals with market research, worldwide computer shipments fell by 28.5 percent in the quarter from October to December compared to the same period in 2021.

10,000 Workers to Be Let Go

The news is particularly dramatic for the software maker, which has invested heavily in generative artificial intelligence, a bright spot in the industry, Reuters reports.

In a message to employees, CEO Satya Nadella said the layoffs, which affect less than five percent of the workforce, will be completed by the end of March, with notices beginning Wednesday.

The timing coincides with when rival Amazon.com announced that more employees would be notified.