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Microsoft is implementing job cuts affecting less than 1% of its workforce, which numbers approximately 228,000 employees, due to performance issues. A company spokesperson emphasized the focus on high-performance talent and the importance of appropriate actions when employees are not meeting performance standards. This decision follows larger downsizing efforts, including a layoff of 10,000 employees in early 2023 and the elimination of 1,900 jobs in the gaming division after the Activision Blizzard acquisition.
Despite a solid net income margin of nearly 38%, Microsoft’s stock underperformed compared to peers, gaining only 12% last year, while the Nasdaq increased by 29%. The company’s relationship with OpenAI, which it has heavily invested in, is described as a “cooperation tension,” particularly as Microsoft recognizes OpenAI as a competitor. Additionally, the rollout of the Microsoft 365 Copilot assistant, leveraging OpenAI technology, has been criticized for being slow. However, Microsoft’s finance head, Amy Hood, remains optimistic about revenue growth from its Azure cloud platform, anticipating acceleration due to increased AI infrastructure capacity. The company plans to invest $80 billion in AI development this year.
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