Microsoft cuts jobs ahead of Q4 figures

Aggressive restructuring will see the majority of job cuts being suffered by Nokia.

Nokia sign
Source: Bloomberg

Markets are expecting Microsoft to announce adjusted earnings per share for its fourth-quarter at 0.605, derived from sales of $22.71 billion and expected pre-tax profits of $6.47 billion. This would be off by 19% - considerably lower than their fourth quarter figures last year.

In the last year Microsoft have acquired the struggling mobile phone company Nokia. Having been the largest mobile phone company in the world, the last decade has seen it superseded by both Samsung and Apple. Even an official association with Microsoft was not enough to turn the company’s fortunes around.

Having now had total control of the company since its €5.4 billion acquisition in September 2013, Microsoft has decided to aggressively restructure the company. This will see some 1,100 jobs cut in Finland and a total of 18,000 globally.

Shares in Microsoft have been strongly bullish for the majority of the last two years. The markets have reacted well to the proactive measures being taken by the firm, concerning the perceived over-staffing.

This has seen the shares move aggressively into overbought territory and now stand some considerable distance from the 200-day moving average. The short-term outlook is overbought but any correction would provide a more attractive entry level into the stock. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.