Microsoft Profit Tops $36.6bn After Buyout Offer

Microsoft says profit for the three months to the end of September jumped to more than $36.6bn (£27.5bn). The results came just days after it announced plans to cut its workforce by more than a quarter.

Quarterly revenue rose 19% from a year earlier to $92.3bn. Growth was driven by cloud computing. Revenue for Microsoft Cloud, its range of enterprise technology services, increased 30%. Shares rose by almost 2.9% in after-hours trading in New York on Wednesday.

On Monday the Windows developer said it would offer buyouts to around 60,000 workers to cut costs while it pours billions of dollars into artificial intelligence. The voluntary redundancy offer goes to eligible employees in teams across Canada, India, the UK and the US. Microsoft said it would adapt the workforce to "changing needs". It said the offer would create "greater flexibility" and let workers leave with financial support and career planning resources. The company employs more than 220,000 people around the world.

AI spending in focus

The firm flagged risks, including "substantial investments" in AI, among other uncertainties that could affect its finances. Chief executive Satya Nadella said AI development has helped grow adoption of the technology and has delivered "real-world impact across every industry".

Like other major tech firms, Microsoft is investing heavily in the infrastructure that powers AI, and questions remain over whether such spending will pay off. Investors have been watching tech earnings closely to gauge whether it is sustainable. Big tech companies like Amazon, Meta and Alphabet are expected to spend more than $700bn this year on AI chips and infrastructure such as data centres.

Microsoft's earnings were stronger than expected. They contrasted with Alphabet, whose results disappointed investors on Wednesday. Its shares fell by 9.75% after it reported a 25% drop in quarterly net profit from a year earlier and said it would keep spending heavily on AI.

Source: BBC News