Microsoft Books $36.6bn Quarterly Profit After Buyout Offer to 60,000 Staff

Microsoft posted a quarterly profit of more than $36.6bn (£27.5bn) for the three months to the end of September, days after offering buyouts to roughly 60,000 workers — about a quarter of its global workforce.

Shares rose almost 2.9% in after-hours trading in New York on Wednesday. The results landed on Monday's announcement that Microsoft would cut costs through voluntary redundancy as it pours billions into artificial intelligence.

The company employs more than 220,000 people worldwide. The buyout offer covers eligible employees across Canada, India, the UK and the US, and Microsoft says it will adapt its workforce to what it called "changing needs".

What drove the numbers?

Quarterly revenue reached $92.3bn, up 19% from a year earlier, driven by strong growth in cloud computing. Microsoft Cloud, its range of enterprise technology services, grew revenue 30%.

CEO Satya Nadella said AI development has helped grow adoption of the technology and delivered "real-world impact across every industry."

The firm flagged risks too. In its results, it pointed to "substantial investments" in AI among uncertainties that could hit its finances.

Why are investors watching so closely?

Investors have scrutinised recent tech earnings to gauge whether heavy AI spending is sustainable. Big tech firms including Amazon, Meta and Alphabet are expected to spend more than $700bn this year on AI chips and infrastructure such as data centres, with questions remaining over whether that outlay will pay off.

Microsoft's stronger-than-expected earnings contrasted sharply with Alphabet's. Google's owner disappointed investors on Wednesday, and its shares fell 9.75% after it reported a 25% drop in quarterly net profit from a year earlier — while pledging to keep spending heavily on AI.

What do the buyouts mean for workers?

Microsoft framed the voluntary offer as a way to create "greater flexibility" for the business. Workers who take the deal will leave with financial support and career planning resources, the company said.

The programme's scale — one in four of its 220,000-plus employees — makes it one of the largest voluntary redundancy schemes a major tech firm has run during the current AI investment cycle.

The bet is that cloud momentum keeps outrunning the cost of AI infrastructure. This quarter's 30% cloud growth suggests it still is, but Alphabet's profit drop shows how quickly the equation can turn when AI spending outpaces returns.