Microsoft has predicted a bad start to 2023 after disappointing year-end results.
Armed with the full financial picture from 2022, the company’s figures show that sales rose 2% between October and December, totaling $52.75 billion, despite This is the smallest quarterly increase in more than 6 years for the tech giant.
Company CEO Satya Nadella told analysts on a conference call that key areas of the business were affected in the months ending 2022, including the Windows operating system and Microsoft Office software.
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According to Microsoft’s chief financial officer, Amy Hood, the December quarter paints a rather bleak picture, who reported that the company saw lower-than-expected growth in some core areas, including Microsoft 365 subscriptions, Windows Commercial products, and Enterprise Security and Mobility Products.
In an effort to win back some markets and attract customers at low prices, earlier this year Microsoft announced a revised Microsoft 365 Basics plan packed with more features than before, at $1.99 ( £1.99) per month.
Nadella thinks existing customers are looking to optimize what they already have, while new product adoption is being scrutinized more carefully, which may have prompted online transactions software modification. He also hinted that Teams continues to do well.
The more Personal Computer (MPC) portion of the business, which includes Xbox and Surface, was even worse, reporting a 19% drop. Windows licenses, which are also part of the MPC, have dropped significantly by 39% compared to the same period last year.
Worse yet, all of this news happened after lay off up to 5% of the company’s global workforce (or 11,000 job losses), suggesting that a series of challenging months may lie ahead for Microsoft.
