Microsoft has announced its intentions to fire 10,000 employees during the third quarter, joining the ranks of other major IT businesses in bracing for the worst. It turns out that the second quarter of the corporation was uneventful: It generated $52.7 billion in revenue, up 2% from the prior year but well shy of the $52.9 analysts had predicted. Additionally, profits decreased by 12 percent to $16.4 billion, a pattern that might persist the entire year.
Microsoft has been enjoying significant cloud revenue growth for years, and it appears that trend will continue despite the declining PC market. Its intelligent cloud business increased 18% from the previous year to $21.5 billion. Microsoft’s efforts to tighten its belt didn’t stop the corporation from potentially investing $10 billion more in OpenAI, the startup behind ChatGPT, which is just another indication that AI will play a significant role in its upcoming projects. According to reports, the corporation will soon add ChatGPT to its Azure OpenAI service and integrate that technology into Bing.
Windows, Xbox, and PC hardware are all part of Microsoft’s More Personal Computing segment, which had a 19% year-over-year decline to $14.2 billion. That is a direct outcome of the decline in the PC market. According to the corporation, sales of Windows to manufacturers decreased by 39%, and sales of Xbox content and services decreased by 12%. Additionally, gadget sales fell by 39%; it turns out that Surface devices weren’t in high demand over the holidays.
According to Jesse Cohen, senior analyst at Investing.com, “the surprise good performance in Microsoft’s main Azure cloud business was enough to calm anxieties surrounding a sharper deceleration path on cloud optimizations, propelling the stock higher.” Tech investors are happy to see that Microsoft’s important cloud business had a slower-than-expected slump.