Is Microsoft Truly Recession-Proof?

For many years, tech giant Microsoft has been largely considered “recession-proof” and a safe bet for investors to hold in a downturn. But as many industries brace for that possibility, the once-resilient Seattle company has laid off employees across the company — from the Xbox console gaming division to Microsoft Strategic Missions and Technology and more. Although the cuts may affect fewer than 1,000 individuals, they could also be a harbinger of troubles to come.

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In July 2022, Microsoft announced it would lay off 1% of its 180,000-person workforce, and the company has brought global hiring to a minimum. Now, as revenue growth slows, the company is deprioritizing new projects and eliminating nonessential positions. But the big tech stalwart is not alone in focusing on frugality.

Other major tech players such as Meta Platforms and Salesforce have limited their hiring, while Netflix, Coinbase, and others have resorted to layoffs. And although Microsoft has reported earnings that beat expectations, its stock experienced a reactive drop, nonetheless. Only time will tell how well the tech giant will ride out a further economic downturn, but if it loses its resiliency, the rest of the industry will likely brace for the worst.