Microsoft reported its slowest top-line growth in six years, with revenue up 2% for the December 2022 quarter, and took an $800 million charge related to its layoff of 10,000 employees. Last week t…
reported its slowest top-line growth in six years, with revenue up 2% for the December 2022 quarter, and took an $800 million charge related to its layoff of 10,000 employees., about 5% of its global workforce, amid signs of an economic slowdown. All told, Microsoft took a $1.17 billion charge for severance, “hardware-related impairment” and lease consolidation costs for the quarter ended Dec. 31, 2022.
Microsoft announced revenue of $52.7 billion, up 2% year over year, and adjusted earnings of $2.32 per share for the quarter, which is the company’s Q2 of fiscal year 2023. Net income declined 12.5%, to $16.4 billion. Analysts on average expected the Redmond, Wash.-based company to post revenue of $52.96 billion and EPS of $2.29, according to financial data provider Refinitiv.
The bright spot for Microsoft’s quarter: Its Intelligent Cloud segment generated revenue of $21.51 billion, up 18%. On the EPS beat and the growth in the cloud business, shares of Microsoft were up 4% in after-hours trading. Xbox content and services revenue decreased 12%, while Windows OEM and devices revenue both decreased 39% and Windows Commercial products and cloud services revenue declined 3%. Microsoft’s search and news ad revenue increased 10%.plans to invest billions over several years in OpenAI — the company that created the buzzy artificial-intelligence chatbot ChatGPT — to “accelerate AI breakthroughs” and “ensure these benefits are broadly shared with the world.
“The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” Microsoft CEO Satya Nadella said in announcing the quarterly earnings. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”. The agency alleged that acquiring Activision Blizzard would let Microsoft “suppress competitors” in the video-game sector.
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