Microsoft reported a 7-percent drop in profit right through its second quarter. The company stated the profit obtained between March and June was US$4.6 billion, compared with $4.97 billion last year in the same period.
According to Microsoft, its Nokia division, which it obtained in April this year, lost $692 million. The announcement comes hardly a week after the company announced it would cut down 18,000 jobs, which is the greatest job cut within the company’s 39-year history. Some 12,500 of those positions will be cut from the Nokia phone business.
Satya Nadella, Microsoft’s chief executive, stated they are driving growth with bold innovations, focussed execution and disciplined decisions, deciding to concentrate on profits from Microsoft’s cloud division, which were expected to double to US$4.4 billion this year.
Microsoft shares were mostly even in trading after stock market hours, though they are up above 20-percent for the year even as sponsors hope Nadella’s vision for change will finally lead to a boost.
Last week, Nadella said he was laying down staff partially because of incorporating most of Nokia’s employees into Microsoft. However, it was also an effort to shift the company towards its cloud computing business and away from its central software operations.
Cloud computing allows companies to rent out computer services, including storage and software, in flexible bundles instead of investing in costly equipment themselves. The jobs targeted for lay-offs comprise some 14-percent of the 127000 workforce, which is almost 50-percent greater than that of rival Apple.