Microsoft Is Making Some More Cuts

Microsoft Is Making Some More Cuts
Paul Allison, CFA

5 months ago2 mins

What’s going on here?

Microsoft is preparing for another round of layoffs, despite its stock price flirting with all-time highs, according to news out on Tuesday.

What does this mean?

Rewind to the start of the year, and job cuts were the flavor of the month, with big firms caught like rabbits in the headlights of the 2022 tech stocks collapse. Fast forward six months, though, and it’s as if we’ve stepped into a parallel universe. Microsoft’s shares have rallied almost 40% this year, painting a rosy picture of the tech giant’s health. But beneath the surface, the company is trimming its workforce, a move that might seem counterintuitive at first glance. But here’s the thing: this latest round of job cuts could be a sign of a new era for Big Tech – the age of layoffs and lift-off, characterized by growth without extravagance.

Tech jobs

Why should I care?

Zooming out: Steady as she grows.

Microsoft just closed the books on what’s shaping up to be its slowest revenue growth in six years. But don’t be too quick to judge: analysts think that the company should still manage to grow its revenue by 7%, and that’s outright impressive if you weigh it against the tumultuous year we’ve just had. And with a dash of AI magic, those experts reckon the software giant will pick up the pace over the next couple of years too – with 11% and 13% growth expected.

Microsoft stock
Source: Google Finance

For markets: BrAIce yourself.

As we gear up for another earnings season, all eyes will be on the AI elite, including Microsoft and Nvidia, whose results days are marked for July 27th and August 23rd. These dates could be game-changers for the market – either fueling even more AI euphoria or seriously dampening the sector’s triumphalism. And here’s a number to etch into your brain: a stone-cold $11 billion – Nvidia’s jaw-dropping revenue guidance for their much-awaited second quarter.



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