In a distressing turn of events, Microsoft (MSFT) has announced a significant reduction in force within its Xbox division, leading to a ripple effect in the tech world. The decision to lay off 650 employees was part of a broader cost-cutting initiative that failed to provide an immediate lift to the company’s stock value, showing a fractional dip in Thursday’s trading session.
This isn’t the first time Microsoft has undertaken such a restructuring effort in its Xbox unit. The aftermath of the recent Activision-Blizzard acquisition has triggered a series of layoffs primarily affecting corporate and supporting functions, as reported by CNBC.
A sincere yet somber message from Microsoft Gaming CEO Phil Spencer acknowledged the gravity of the situation, emphasizing the company’s gratitude for the impacted colleagues. Ensuring their welfare, Microsoft plans to offer comprehensive exit packages, including severance, extended healthcare benefits, and outplacement services to aid in their transition.
All This and Service Outages, Too
Adding to the company’s woes are the service disruptions faced by Microsoft, including a partial outage affecting various services such as Xbox, Outlook, Azure, and Teams during the early hours of Thursday. The incident, which commenced around 8:00 a.m. Eastern Time, was eventually resolved after causing considerable inconvenience to users.
The root cause of this disruption remains uncertain, with reports indicating a noticeable impact on AT&T networks. Speculation arose regarding the connection between this incident and a prior Azure outage in July, attributable to a distributed denial-of-service (DDoS) attack that momentarily pitted Microsoft’s automated defenses against itself.
Is Microsoft a Buy, Hold, or Sell?
Turning towards investor sentiment, Wall Street analysts maintain a Strong Buy consensus on MSFT stock, backed by 30 Buy ratings and one Hold recommendation in the past three months. Following a robust 26.01% surge in its stock price over the last year, the current average price target of $502.84 per share suggests a potential upside of 19.42%.
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The opinions expressed herein are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.
