Microsoft earnings rise despite layoffs
Quarterly profits jumped to $36.6 billion while the company cuts 60,000 jobs to fund AI expansion.
By Megan Greco ·
Microsoft reported quarterly profits of more than $36.6 billion on Wednesday.
The company announced major workforce reductions just days before releasing these financial figures. On Monday, the software maker stated it would offer buyouts to approximately 60,000 employees. This move aims to reduce costs as the firm directs billions of dollars toward artificial intelligence infrastructure.
Microsoft has maintained a global workforce of more than 220,000 people. The company extended a voluntary redundancy offer to eligible staff in Canada, India, the United Kingdom, and the United States. Management cited changing business needs as the reason for the cuts. The firm said the initiative provides financial support and career planning resources to departing workers.
Revenue for the three months ended in September reached $92.3 billion. This figure represents a 19 percent increase compared to the same period last year. Growth in cloud computing drove the majority of the sales. Microsoft Cloud revenue, which includes enterprise technology services, rose by 30 percent.
Investors watched the results closely to assess the sustainability of heavy AI spending. Major tech competitors including Amazon, Meta, and Alphabet plan to spend more than $700 billion on AI chips and data centers this year. Microsoft shares gained almost 2.9 percent in after hours trading in New York following the announcement.
Chief Executive Satya Nadella stated that AI development has driven adoption and delivered real-world impact across industries. The company also flagged risks in its financial report. It noted that substantial investments in AI and other uncertainties could impact future finances.
Microsoft's strong performance contrasted with results from Alphabet. The Google parent company disappointed investors on Wednesday. Alphabet shares fell by 9.75 percent after reporting a 25 percent drop in quarterly net profit year over year. The firm confirmed it will continue heavy spending on AI despite the decline.
Source: Casualty
