Microsoft Pares Expenses By Cutting Jobs; Stock Climbs On Cloud Computing Results
Microsoft quietly cut jobs this week but released few details. That news comes in what’s otherwise been a good week for the company as the stock reached a 15-year high.
The New York Times reported that Microsoft laid off about 1,000 employees on Wednesday. A spokesman confirms there were job cuts and says they were spread across more than one business area and country. In the fiscal year that ended in June, Microsoft eliminated 19,000 jobs, and announced plans to cut an additional 7,800 this fiscal year. Most of those job cuts are connected to its Nokia phone business.
Still, investors found a lot that they liked in Microsoft’s quarterly results. The shares jumped 10 percent as revenue for Microsoft’s cloud computing service, Azure, more than doubled.
IDC analyst Al Hilwa says investors are encouraged by Microsoft’s progress competing against Puget Sound-area rival Amazon.
"Amazon is clearly the one company that has seen this opportunity ten years ago and has been playing it up and is definitely the leader, but other players are definitely transforming their business and Microsoft is at the top of that list," Hilwa said.
Amazon said its cloud revenue climbed 78 percent, and the company surprised investors by posting a quarterly profit.
Meanwhile, Hewlett-Packard announced plans to get out of cloud computing. The company told the Wall Street Journal that it will instead help companies set up their own internal systems.