Microsoft on Tuesday reported a 12% drop in profit for the October-December quarter, reflecting the economic uncertainty it said led it to decide to cut 10,000 employees.
The company reported quarterly profit of $16.43 billion, or $2.20 per share.
Excluding one-time items, the Redmond, Washington-based company said it earned $2.32 per share, which topped Wall Street’s expectation for adjusted earnings of $2.29 per share.
Read also: Microsoft adds $10 billion to investment in ChatGPT maker OpenAI
The software maker posted revenue of $52.75 billion in the October-December period, its second fiscal quarter, up 2% from the same period a year ago. Analysts polled by FactSet expected Microsoft To post revenue of $52.99 billion for the October-December quarter.
Microsoft last week blamed “broad economic conditions and changing customer preferences” for its decision to cut its global workforce by about 5%. It is one of several technology companies, including GoogleAmazon, Salesforce and Facebook parent Meta will announce massive layoffs.
Read also: Will Microsoft Drop Out of the Metaverse? All you need to know
Microsoft’s personal computing business, centered on its Windows software, was widely expected to continue a decline that began last year due to economic uncertainties and a slump in demand.
The company receives licensing revenue from PC manufacturers who install the Windows operating system on their products.
Market research firm Gartner reported that worldwide PC shipments declined by 28.5% in the October-December quarter from the same period in 2021, the sharpest quarterly decline since Gartner tracked the market in the 1990s .
Read also: Microsoft reports biggest drop in tech earnings since 2016
Factors dampening consumer demand for PCs include rising inflation, higher interest rates, expectations of a global recession and the fact that many people already bought new computers during the COVID-19 pandemic, Gartner said.
With a weak PC market, analysts were watching closely for results from Microsoft’s other big business areas — namely, its cloud-computing division and its Office suite of workplace software.
To further integrate the latest advances in artificial technology into its products, Microsoft on Monday announced a “multi-year, multi-billion dollar investment” in artificial intelligence startup OpenAI, maker of ChatGPT and other tools that generate readable text and computer code. Can write and generate new images.
The text of this story is published from a wire agency feed without any modification.
catch all corporate news And updates on Live Mint. download mint news app to receive daily market update & stay business News,