Microsoft, amid layoffs, says quarterly profit declined 12% to $16.43 bn

Microsoft last week blamed macroeconomic conditions and changing customer priorities for its decision to cut nearly 5% of its global workforce

Microsoft
Photo: Bloomberg
AP Washington
2 min read Last Updated : Jan 25 2023 | 7:08 AM IST

Microsoft on Tuesday reported a 12% drop in profit for the October-December quarter, reflecting the economic uncertainty it said led to its decision to cut 10,000 workers.

The company reported quarterly profit of $16.43 billion, or $2.20 per share.

Excluding one-time items, the company based in Redmond, Washington, said it earned $2.32 a share, which topped Wall Street expectation for adjusted earnings of $2.29 a share.

The software maker posted revenue of $52.75 billion in the October-December period, its second fiscal quarter, up 2% from the same period a year ago.

Analysts polled by FactSet expected Microsoft to post revenue of $52.99 billion for the October-December quarter.

Microsoft last week blamed macroeconomic conditions and changing customer priorities for its decision to cut nearly 5% of its global workforce.

It's one of a number of tech companies, including Google, Amazon, Salesforce and Facebook parent Meta, to announce mass layoffs.

Microsoft's personal computing business, centered on its Windows software, was widely expected to continue a deterioration that began earlier last year due to economic uncertainties and crimped demand.

The company gets licensing revenue from PC manufacturers who install its Windows operating system on their products.

Market research firm Gartner reported that worldwide PC shipments in the October-December quarter declined 28.5% from the same period of 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.

With a weak PC market, analysts were closely watching for results from Microsoft's other big business segments namely, its cloud-computing division and its Office suite of workplace software.

In a bid to further integrate the latest advances in artificial technology into its products, Microsoft on Monday announced 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.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :MicrosoftMicrosoft layoffsprofit margins

First Published: Jan 25 2023 | 7:08 AM IST

Next Story