Microsoft made $27.2 billion in 3 months and still chose to lay 9,000 people off, in case you thought there was simply no other way
Every time I feel like I'm getting a handle on the growth-based nature of capitalism—the idea that the number has to go up, and simply making a profit isn't enough, yadda yadda—a stat in an earnings report clocks me over the head and uproots me from whatever mooring I thought I had. For example, did you know that Microsoft made $27.2 billion in net income this year?
That's 27,000 million dollars, or roughly 0.39 Blizzard acquisitions. If we take Glassdoor's median average game developer salary of $81,000 a year at face value, that's enough to pay the salaries of 335,802 developers for a year. If I do any more napkin math I'm gonna make myself too sad.
That's per the Q4 earnings release (thanks, GamesRadar) which compares itself to the same three-month period of last year. Here are the full stats—the harsh industry conditions under which Microsoft made the decision to put 9,000 employees across the company out of work.
- Revenue was $76.4 billion and increased 18% (up 17% in constant currency)
- Operating income was $34.3 billion and increased 23% (up 22% in constant currency)
- Net income was $27.2 billion and increased 24% (up 22% in constant currency)
- Diluted earnings per share was $3.65 and increased 24% (up 22% in constant currency)
As for the entire fiscal year, Microsoft had a net income of $101.8 billion, an increase of 16%.
At the very least, this is congruent with Microsoft continuing to boast about how well it's doing, so well in fact that it cancelled Rare's Everwild, called curtains on ZeniMax's shuttered MMO, shoved a pillow over the head of the Perfect Dark reboot, and stilled Warcraft Rumble.
If we take Microsoft chairman and CEO Satya Nadella's words from late last month for granted, this is all due to something called the "enigma of success in an industry that has no franchise value", which is "dynamic, sometimes dissonant, and always demanding."
Looking at the stats above, I'm not sure it's actually that enigmatic—there's no real conspiracy here. Microsoft's net income increased 24% compared to the same window of time last year. It has made, in the past three months, more money than any of its laid-off developers and employees will ever see in their lives. Multiple thousand lives, in fact. 4,197 if we assume they work 80 years at that median salary and then die. I told you the math was making me sad.
Things are even more grim if we take The Verge's report on the fallout of all this as gospel, where one employee claimed that "Microsoft’s leadership team had the choice between reducing investment in AI infrastructure for the upcoming financial year or deeply cutting its headcount and operating expenses."
Over the past couple of years, Microsoft's presided over the closure of multiple studios, shut down multiple games, and laid off thousands, and whether The Verge's report is right or not, I think we can conclusively say that it's probably not an enigma. It's probably because it didn't want to make slightly less money than it could've been making. Heaven forbid we only increase our quarterly net income by 14%, the horror. Ugh. Put it on the list.