Microsoft shares jumped 3.8% yesterday to close at a 14-year high.
And after today’s massive layoff announcement, in which the company said that it would cut 18,000 jobs, the stock is only going higher.
In pre-market trading, MSFT is up 2.4%.
“We will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year,” said CEO Satya Nadella in a memo to employees.
Despite the tumbling national unemployment rate, some big U.S. corportation are continuing to reduce headcounts in their efforts to cut costs, improve profit margins, and boost earnings growth.
“With earnings growth (4.6%) expected to rise at a faster rate than revenue growth (2.7%) in Q2 and in future quarters, companies (particularly in food-oriented industries) have continued to discuss cost- cutting initiatives to maintain earnings growth rates and profit margins,” said FactSet’s John Butters on Friday.
Microsoft is a component in the Dow Jones Industrial Average and its one of the most heavily weighted stocks in the S&P 500 and Nasdaq.
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