Microsoft Cuts 4,800 Jobs, Divests Xbox Studios; Game Pass Misses Targets, FCF Outlook Negative
MSFT is trading near its 52-week low of $349.2 (11% above the low).
Summary
Microsoft is undertaking a significant restructuring, cutting approximately 4,800 jobs, representing 2.1% of its workforce, with a focus on the Xbox division. This includes plans to spin out or sell five game studios. The company also revealed that Game Pass subscribers are substantially below internal targets, currently at 30 million against a projected 77 million for the year. Wolfe Research lowered its price target, citing increased 2027 capital expenditures and forecasting negative free cash flow for 2027. This news indicates strategic shifts and cost-cutting measures in certain segments, contrasting with recent strong performance and AI investments.
At the time of this announcement, MSFT was trading at $386.20 on NASDAQ in the Technology sector, with a market capitalization of approximately $2.9T. The 52-week trading range was $349.20 to $555.45. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Wiseek News.