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Big Tech ‘Bloodletting’ Continues: Microsoft’s Worst Earnings In Years Leads to Mass Layoffs

    Microsoft experienced its slowest quarter of growth in the last six years in the three months ending Dec. 31, less than a week after the company made major staffing cuts, according to The Wall Street Journal.

    Revenue increased by 2% to $52.7 billion while adjusted net income fell 12% to $16.4 billion, according to Microsoft’s Tuesday earnings report. The tech giant laid off 10,000 employees last week in response to an anticipated slowdown in consumer demand and a possible recession.

    Shares initially jumped after the earnings report beat expectations, however the company then issued a statement predicting an annual revenue of roughly $51 billion, slightly less than what investors had hoped for, causing stocks to give up their gains, CNBC reported. By time of writing, shares were ultimately down roughly 1.0% to $242 per share, according to Google Finance.

    Microsoft’s earnings release made no mention of a recession and instead pointed to the strength of the company’s cloud computing division.

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    “We are focused on operational excellence as we continue to invest to drive growth,” said CEO Sataya Nadella, in the company’s earnings report. “Microsoft Cloud revenue was $27.1 billion, up 22% (up 29% in constant currency) year-over-year as our commercial offerings continue to drive value for our customers.”

    Microsoft’s Azure, the company’s cloud computing arm, grew 31% surpassing investors’ expectations, according to the WSJ. Some analysts cited the strength of Microsoft’s broader Intelligent Cloud division, which grew 18% to $21.5 billion, as part of the reason that stocks rose.

    Sales for Windows licenses and devices both decreased by 39%, followed by Xbox content and services which decreased by 12%, Microsoft reported. Meanwhile, ads revenue, excluding traffic acquisition costs, grew by 10%.

    Microsoft’s weak earnings come as the tech industry struggles following rapid growth during the height of the COVID-19 pandemic. Other big tech titans, including Meta, Amazon and Google have each cut at least 10,000 jobs in the past three months.

    Microsoft did not immediately respond to a Daily Caller News Foundation request for comment.

    Post written by Lorenzo Prieto. Republished with permission from DCNF. Images via Becker News.

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