Due to customers’ reduced expenditure on technology due to economic hardship, Microsoft sales have decreased significantly.
The company reported the smallest quarterly growth in more than six years, a 2% increase in sales to $52.7 billion (£42.7 billion) in the three months ending in December.
The company announced just a few days prior that it would cut 10,000 positions, or around 5%, from its staff.
Jobs have been lost in the tech sector recently as spending on advertising and other things has decreased.
While people that splurged on computers and other equipment while stranded at home during the pandemic have been cutting back, businesses are concerned about the economy, especially as the cost of living rises.
Microsoft reported a 12% decline in sales from the Xbox video gaming system and a 39% decline in spending on its Windows software.
Sales growth in the company’s Azure cloud computing division, which analysts view as a significant growth driver for the company, was stronger than anticipated and increased by 31%, which helped the company’s shares rise in after-hours trading.
But overall earnings fell 12% to $16.4 billion.
Wedbush Securities analyst Dan Ives predicted in a note that the slowdown for Microsoft would pass quickly prior to the company’s update.
With cost-cutting and strategic initiatives already in place, he added, “Our recent interactions with customers and partners confirms our confidence that [Microsoft] can ride out this economic storm and ultimately be in a stronger position on the other side.”