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Microsoft expects headcount to decrease in coming quarters, CFO Amy Hood said during an earnings conference call with analysts on Wednesday.
"We continue to evolve how we operate to increase our pace and agility, and therefore we expect headcount will decrease year over year," Hood said. She was discussing the outlook for Microsoft's next fiscal year, which starts in July and runs through June 2027. Before the call, Hood sent out an internal memo to employees touting "increased pace" and "tighter, more accountable squads" amid recent organizational changes. Microsoft has cut thousands of jobs in recent quarters.
The CFO's comments on Wednesday suggest that pressure on employees may continue. Earlier in April, Microsoft offered buyouts to long-serving employees as a way to cut costs, affecting as much as 7% of its US workforce of 125,000 people, or about 8,750 people. The buyouts apply to employees who want to retire and whose years of service plus age add up to 70 or more. Quarterly revenue came in at $83 billion, while net income was $32 billion.
Barclays analyst Raimo Lenschow noted growth of Microsoft's cloud business was below the "significant acceleration" at competitors Amazon and Google during the most-recent quarter. Hood issued a 39% to 40% growth forecast for the company's Azure business on the call. Earlier this year, Microsoft shares suffered their worst quarterly stock performance since 2008, on concern about whether the company's AI infrastructure buildout will pay off and AI's software threat.
Microsoft and OpenAI changed their partnership again this week, letting OpenAI work more with other cloud providers including Amazon. The next day, Amazon and OpenAI said the startup's GPT models will be available on Amazon's cloud. The company recently unveiled a deal with Accenture to roll out Copilot to nearly 750,000 of the consulting firm's employees. Microsoft also recently announced a new software bundle with Copilot built in.
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