3 ms·

It is not doing that great really, it just sounds like it. Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective

by mpol 3y ago

It is not doing that great really, it just sounds like it. Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value.

bagacrap 3y ago
Inflation is ~5% yoy
JumpCrisscross 3y ago
> Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value. To illustrate, suppose they sold $100 last year, or $25 per quarter. That means they sold $26.75 last quarter [a], of which $2.41 was profit [b]. Last year it was $2.25 [c]. Inflation means last year's profit bought as much as $2.48 today [d], i.e. real profit is down 3%. [a] 25 x 107%* [b] 26.75 x 9%* [c] 25 x 9%* [d] 2.25 x 110%*
- pcthrowaway 3y ago
  Unless they're giving their employees annual raises that match inflation, this doesn't really seem like an explanation for layoffs, as the salary for their employees also declines in inflation-adjusted numbers. If they are giving employees raises that match inflation, I wonder if they've decided that some layoffs while keeping the raise structure the same is better for morale than no layoffs but turning the annual raise percentages down a bit.
  - JumpCrisscross 3y ago
    > wonder if they've decided that some layoffs while keeping the raise structure the same is better for morale than no layoffs but turning the annual raise percentages down a bit Your competitors will pay real market for your best employees. Better to trim than spread the pain.
amf12 3y ago
But that is just growth over previous Q/Y, so yes, they are losing value, but that is because of the increased costs due to inflation, and decrease in expected revenue due to inflation. Their margin is still above the inflation. I wouldn't say they aren't doing great for the current economic conditions. Layoffs though, are due to increased interest rate, which kinda correlates to losing value.

by mpol 3y ago

It is not doing that great really, it just sounds like it. Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value.

bagacrap 3y ago

Inflation is ~5% yoy

JumpCrisscross 3y ago

> Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value. To illustrate, suppose they sold $100 last year, or $25 per quarter. That means they sold $26.75 last quarter [a], of which $2.41 was profit [b]. Last year it was $2.25 [c]. Inflation means last year's profit bought as much as $2.48 today [d], i.e. real profit is down 3%. [a] 25 x 107%* [b] 26.75 x 9%* [c] 25 x 9%* [d] 2.25 x 110%*

pcthrowaway 3y ago
Unless they're giving their employees annual raises that match inflation, this doesn't really seem like an explanation for layoffs, as the salary for their employees also declines in inflation-adjusted numbers. If they are giving employees raises that match inflation, I wonder if they've decided that some layoffs while keeping the raise structure the same is better for morale than no layoffs but turning the annual raise percentages down a bit.
- JumpCrisscross 3y ago
  > wonder if they've decided that some layoffs while keeping the raise structure the same is better for morale than no layoffs but turning the annual raise percentages down a bit Your competitors will pay real market for your best employees. Better to trim than spread the pain.

amf12 3y ago

But that is just growth over previous Q/Y, so yes, they are losing value, but that is because of the increased costs due to inflation, and decrease in expected revenue due to inflation. Their margin is still above the inflation. I wouldn't say they aren't doing great for the current economic conditions. Layoffs though, are due to increased interest rate, which kinda correlates to losing value.