Microsoft Cuts 2% Workforce to Restructure Xbox Division
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10 hours ago
0mins
Source: NASDAQ.COM
- Layoff Scale: Microsoft announced the elimination of 4,800 positions, representing over 2% of its workforce, with 3,200 jobs cut from the underperforming Xbox division, indicating a strong commitment to restructuring efforts.
- Investment Return Issues: Xbox CEO Asha Sharma highlighted alarming investment returns, noting that the division typically loses 64 cents for every dollar invested, posing a significant threat to Microsoft's overall profitability.
- Revenue Decline: In the first quarter of 2023, Xbox's revenue fell by 7% on a foreign-exchange-adjusted basis, following a 6% decline in the previous quarter, reflecting insufficient competitiveness in the market that requires urgent improvement.
- Strategic Reset: Sharma emphasized that the restructuring will streamline management layers and enhance decision-making efficiency, which, if successful, could improve Xbox's market performance and strengthen Microsoft's overall growth potential.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 390.490
Low
500.00
Averages
631.36
High
678.00
Current: 390.490
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Subscription Service Underperformance: The company's Game Pass subscription service is falling short of internal targets, projected to reach 77 million users this year but currently at only 30 million, highlighting the challenges Microsoft faces in the gaming market and the need for strategic adjustments.
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See More
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