Microsoft Says Q4 2022 Sales Slowed, Profits Slumped as Cloud Computing Revenue Sees Growth
Microsoft said on Tuesday that sales slowed and profits fell in the final quarter of 2022 as a darkening economic outlook prompted it to lay off 10,000 workers.
The Washington state-based tech giant – owner of LinkedIn, Xbox and Windows – said overall sales rose just 2% in the October-December period to 52, $7 billion (about Rs. 4,30,325 crore), the slowest increase in six years.
Net profit landed at $16.4 billion (about Rs. 1,33,915 crore) for the quarter, down 12% year-on-year, according to its earnings release.
The results, however, met, or in some segments exceeded, expectations and Microsoft’s share price rose more than 4% in late trading after the earnings announcement.
Microsoft chief executive Satya Nadella said last week he was laying off around 5% of the company’s workforce, just days before pumping billions of dollars into OpenAI, the company behind the chatbot. controversial ChatGPT.
The job cuts matched similar cuts at other tech giants as the companies reversed a major wave of hiring during the pandemic when demand for tech products soared.
Nadella said ChatGPT and other AI breakthroughs from research firm OpenAI will be integrated into Microsoft products that include the Windows operating system, Office and the Bing search engine.
Microsoft is also trying to overcome major regulatory hurdles to complete its takeover of video game giant Activision Blizzard for $68.7 billion (about Rs. 5,64,474 crore).
US and European regulators are highly skeptical of the purchase and say it would give Microsoft’s Xbox console an unfair advantage over competitors like Sony’s PlayStation.
The group’s quarterly results were eagerly awaited by the market for their approximation to cloud computing, which is Microsoft’s biggest business and an indicator for the economy as a whole.
The company’s “intelligent cloud” business, which bundles its servers and data analytics services, brought in $21.5 billion in its fiscal second quarter, up 18% year-on-year.
Growth of its remote computing platform, Azure, slower than usual at 31%, boosted business.