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Microsoft profits soar days after announcing thousands of layoffs
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Technology giant Microsoft says its profits for the three months to the end of September jumped to more than $36.6bn (£27.5bn), days after announcing plans to cut its workforce by more than a quarter.
Key facts
- Technology giant Microsoft says its profits for the three months to the end of September jumped to more than $36.6bn (£27.5bn), days after announcing plans to cut its workforce by more than a quarter
- Microsoft said on Wednesday that its quarterly revenue rose to $92.3bn
- up 19% from a year earlier
- driven by strong growth in its cloud computing business
- Big tech companies like Amazon, Meta and Alphabet are expected to spend more than $700bn this year on AI chips and infrastructure like data centres
- The firm's shares fell by 9.75% after it reported a 25% drop in quarterly net profit from a year earlier and said it will continue to spend heavily on AI
Summary
On Monday, the Windows developer said it would offer buyouts to around 60,000 of its workers to cut costs as it pours billions of dollars into artificial intelligence (AI). Like many other major tech firms, Microsoft is investing heavily in the infrastructure that powers AI even as questions remain over whether such huge spending will pay off. Microsoft shares rose by almost 2.9% in after hours trading in New York on Wednesday. The recent financial results of tech companies have been closely watched by investors as they gauge whether the heavy spending on AI is sustainable.