Microsoft on Tuesday reported a 12% drop in profit for the October-December quarter, reflecting the economic uncertainty it said led to its decision to cut 10,000 workers. The company reported quarterly profit of $16.43 billion, or $2.20 per share. Excluding one-time items such as $800 million to pay severance to laid-off employees, the company based in Redmond, Washington, said it earned $2.32 a share, which topped Wall Street expectation for adjusted earnings of $2.29 a share. Microsoft’s stock was up more than 4% in extended trading following the release of its earnings report. Read more: Job cuts in tech sector spread, Microsoft lays off 10000 The software maker posted revenue of $52.75 billion in the October-December period, its second fiscal quarter, up 2% from the same period a year ago. Analysts polled by FactSet expected Microsoft to post revenue of $52.99 billion for the quarter. Microsoft last week blamed “macroeconomic conditions and changing customer priorities” for its decision to cut nearly 5% of its global workforce. It’s one of a number of tech companies, including Google, Amazon, Salesforce and Facebook parent Meta, to announce mass layoffs. Microsoft's personal computing business, centered on its Windows software, was widely expected to continue a deterioration that began earlier last year due to economic uncertainties and crimped demand. Quarterly sales from that segment dropped 19% to $14.24 billion, the company said Tuesday. The company gets licensing revenue from PC manufacturers who install its Windows operating system on their products. Market research firm Gartner reported that worldwide PC shipments in the October-December quarter declined 28.5% from the same period of 2021, the steepest quarterly decline since Gartner began tracking the market in the 1990s. Read more: Google axes 12000 jobs, layoffs spread across tech sector Among the factors reducing consumer demand for PCs were increased inflation, higher interest rates, the expectation of a global recession and the fact that many people already bought new computers during the COVID-19 pandemic, Gartner said. With a weak PC market, analysts were closely watching for results from Microsoft's other big business segments — namely, its cloud-computing division, where sales grew 18% to $21.51 billion. Revenue also grew from the company's workplace software segment — which includes the Office suite of products — by 7% to $17 billion. In a bid to further integrate the latest advances in artificial technology into its products, Microsoft on Monday announced a “multiyear, multibillion dollar investment” in the artificial intelligence startup OpenAI, maker of ChatGPT and other tools that can write readable text and computer code and generate new images.

Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as the economic boom that the industry rode during the COVID-19 pandemic ebbs. Alphabet CEO Sundar Pichai, the parent company of Google, informed staff Friday at the Silicon Valley giant about the cuts in an email that was also posted on the company's news blog. It's one of the company's biggest-ever round of layoffs and adds to tens of thousands of other job losses recently announced by Microsoft, Amazon, Facebook parent Meta and other tech companies as they tighten their belts amid a darkening outlook for the industry. Just this month, there have been at least 48,000 job cuts announced by major companies in the sector. “Over the past two years we’ve seen periods of dramatic growth,” Pichai wrote. “To match and fuel that growth, we hired for a different economic reality than the one we face today.” He said the layoffs reflect a “rigorous review" carried out by Google of its operations. The jobs being eliminated “cut across Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the layoffs. Regulatory filings illustrate how Google’s workforce swelled during the pandemic, ballooning to nearly 187,000 people by late last year from 119,000 at the end of 2019. Pichai said that Google, founded nearly a quarter of a century ago, was “bound to go through difficult economic cycles.” “These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he wrote. There will be job cuts in the U.S. and in other unspecified countries, according to Pichai’s letter. The tech industry has been forced to freeze hiring and cut jobs “as the clock has struck midnight on hyper growth and digital advertising headwinds are on the horizon,” Wedbush Securities analysts Dan Ives, Taz Koujalgi and John Katsingris wrote Friday. Just this week, Microsoft announced 10,000 job cuts, or nearly 5% of its workforce. Amazon said this month its cutting 18,000 jobs, although that's a fraction of its 1.5 million strong workforce, while business software maker Salesforce is laying off about 8,000 employees, or 10% of the total. Last fall Facebook parent Meta announced it would shed 11,000 positions, or 13% of its workers. Elon Musk slashed jobs at Twitter after after he acquired the social media company last fall. Read more: Job cuts in tech sector spread, Microsoft lays off 10,000 Those job cuts are hitting smaller players as well. U.K.-based cybersecurity firm Sophos laid off 450 employees, or 10% of its global workforce. Cryptocurrency trading platform Coinbase cut 20% of its workforce, about 950 jobs, in its second round of layoffs in less than a year. "The stage is being set: tech names across the board are cutting costs to preserve margins and get leaner" in the current economic climate, the Wedbush analysts said. Employment in the U.S. has been resilient despite signs of a slowing economy, and there were another 223,000 jobs added in December. Yet the tech sector grew exceptionally fast over the last several years due to increased demand as employees began to work remotely. CEOs of a number of companies have taken blame for growing too fast, yet those same companies, even after the latest round of job cuts, remain much larger than they were before the economic boom from the pandemic began.