February 4, 2023

Pjnews

Today's News Headlines, Breaking News & Latest News from India and World, News from Politics, Sports, Business, Arts and Entertainment

Microsoft earnings: $800 million charge for layoffs, revenue up 2%

2 min read

Microsoft reported the slowest top-line growth in six years, with revenue up 2% for the December 2022 quarter and took an $800 million charge related to its 10,000 job cuts.

Last week the tech giant announced it was cutting 10,000 positions, about 5% of its global workforce, amid signs of an economic slowdown. All told, Microsoft took a $1.17 billion charge for severance, “hardware-related impairment” and lease consolidation costs for the quarter ending Dec. 31, 2022.

Microsoft announced revenue of $52.7 billion, up 2% year over year, and adjusted earnings of $2.32 per share for the quarter, which is the company’s fiscal 2023 Q2. Analysts on average had expected the Redmond, Wash.-based company to post revenue of $52.96 billion and EPS of $2.29, according to financial information provider Refinitiv.

Bright spot for Microsoft’s quarter: Its Intelligent Cloud segment posted revenue up 18% to $21.51 billion. Windows OEM and device revenue both fell 39%, while Windows commercial products and cloud services revenue fell 3%. Xbox content and services revenue fell 12%. Microsoft’s search and news advertising revenue (excluding traffic acquisition costs) grew 10%.

Earlier this week, Microsoft announced plans to invest billions over several years in OpenAI — the company that created the artificial-intelligence chatbot ChatGPT — to “accelerate AI breakthroughs” and “ensure these benefits are widely shared with the world.” Microsoft has pledged to invest $10 billion overall in OpenAI, the New York Times reported, following $1 billion in 2019 and another $2 billion in 2021. Under the agreement, Microsoft’s Azure serves as OpenAI’s exclusive cloud provider.

“The next big wave of computing is being born, as Microsoft Cloud leverages the world’s most advanced AI models into a new computing platform,” Microsoft CEO Satya Nadella said in the earnings announcement. “We are committed to helping our customers use our platforms and tools to do more in less time today and innovate for the future in the new age of AI.”

Meanwhile, Microsoft faces an antitrust lawsuit filed by the FTC in December to block its $69 billion deal to acquire Activision Blizzard. The company alleged that Activision’s ownership of Blizzard would allow Microsoft to “suppress competitors” in the video-game sector.

Pictured above: Microsoft CEO Satya Nadella

Leave a Reply

Your email address will not be published. Required fields are marked *