Tech giant Microsoft has confirmed that another round of layoffs has been made, after laying off 10,000 employees in January this year.
The new round of layoffs is reported to have affected employees in the customer service, support, and sales unit. Reports reveal that 276 people in its home state of Washington were impacted. Of the 276 employees, 66 staff members worked virtually. Many of the affected employees have already taken to their LinkedIn pages to make necessary changes.
Confirming the recent layoff at the company, a spokesperson at Microsoft said, “Organizational and workforce adjustments are necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners”.
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Despite announcing organizational and workforce adjustments as part of the reason for its recent layoff, Microsoft has been doing well in terms of its financial situation so far in 2023.
In its first quarter (Q1) report for 2023, Microsoft beat Wall Street’s estimates for quarterly revenue and profit, driven by growth in its cloud computing and Office productivity software businesses, and the company said artificial intelligence products were stimulating sales.
Microsoft’s growth at its cloud business Azure was 27% in the quarter, beating analyst expectations for 26.6% growth. The company’s revenue rose 7% to $52.9 billion in the quarter ended March, inching past analyst estimates of $51.02 billion.
Analysts had expected a gloomy economic outlook to hit Microsoft’s Windows business, which depends heavily on PC sales that have sagged in recent quarters. The sales drop in the segment was less severe than analysts expected, with Microsoft reporting revenue of $13.3 billion versus analyst estimates of $12.19 billion.
In the past six months, the company has seen its stock price go up by 40.74 percent. Its shares have surged 38% to date.
The bulk of Microsoft sales still come from selling software and cloud computing services to customers. Recall that the company grabbed headlines this year with its partnership with ChatGPT maker OpenAI, after upgrading the Bing search engine with artificial intelligence technology.
Even as Microsoft makes significant cuts, the CEO Satya Nadella said the company will continue to invest in “strategic areas for our future” and pointed to advances in AI as “the next major wave” of computing.
He had earlier informed investors during a conference call that the company has more than 2,500 Azure-OpenAI service customers and said AI was integrated into a wide array of products.
Notably, Morgan Stanley analysts disclosed that Microsoft will ride the generative A.I. wave to a $3 trillion valuation.
He believes that Artificial intelligence-driven gains can propel Microsoft to join Apple in the elite category of stocks with a market capitalization of more than $3 trillion.
The analysts, led by Keith Weiss, named Microsoft their top pick among large-cap software companies and said that it is the best place in the sector to benefit from the growth of AI.