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Microsoft Profits Hit $36.6 Billion as Layoff Plans Emerge
Microsoft has reported quarterly profits of more than $36.6 billion, days after announcing plans to offer buyouts to around 60,000 employees. The technology giant is also investing billions of dollars in artificial intelligence (AI).
For the three months ending in September, Microsoft’s revenue rose 19% year-on-year to $92.3 billion. Strong growth in its cloud computing business helped drive the increase.
The results come as major technology companies face growing scrutiny over their spending on AI. While investors are watching the potential returns, firms continue to invest heavily in the infrastructure needed to power the technology.
Microsoft Cloud Revenue Grows by 30%
Microsoft said revenue from Microsoft Cloud increased by 30%. The business provides enterprise technology services to companies and other organizations.
Meanwhile, Chief Executive Satya Nadella said AI development was encouraging wider adoption of the technology. He added that it was delivering “real-world impact across every industry.”
However, the company also flagged risks linked to substantial AI investments and other uncertainties that could affect its financial performance.
Microsoft Plans Voluntary Buyouts for 60,000 Workers
Earlier in the week, Microsoft announced a voluntary redundancy offer for eligible employees across Canada, India, the United Kingdom and the United States.
According to the company, the programme will help it adapt its workforce to changing needs. It will also give eligible employees financial support and career planning resources as they leave.
Microsoft currently employs more than 220,000 people worldwide. The proposed buyouts would affect around 60,000 workers, according to the announcement.
Microsoft Profits Hit $36.6 Billion as Layoff Plans Emerge. Photo Courtesy Getty Images
Big Tech AI Spending Faces Investor Scrutiny
Microsoft is among several major technology companies investing heavily in AI infrastructure. These investments include AI chips and data centres needed to develop and run AI systems.
Amazon, Meta and Alphabet are expected to spend more than $700 billion on AI infrastructure this year. As a result, investors are closely monitoring whether the spending can deliver sustainable returns.
Microsoft shares rose by almost 2.9% in after-hours trading in New York on Wednesday following the results.
By contrast, Alphabet faced a negative market reaction after reporting its quarterly results. Its shares fell by 9.75% after the company reported a 25% drop in quarterly net profit compared with a year earlier.
Alphabet also indicated that it would continue investing heavily in AI, keeping the spotlight on how technology companies balance spending with profitability.
Source – BBC News
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