Microsoft Is Laying Off Employees — Will That Negatively Affect Its Stock?
Written by
Chris Adam
Edited by
Jenna Klaverweiden
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Any big shake-ups in the tech world can spook investors and stock analysts. That includes recent layoffs at tech giants such as Microsoft (MSFT). Leaders at the company said those being let go are among the lowest performers there, according to Inc.
At times, company layoffs can have big impacts on stocks. GOBankingRates spoke with some tech leaders and financial experts to find out whether they think the layoffs at Microsoft will negatively affect its stock.
Also see how high or low investing experts expect Microsoft’s stock to go in 2025.
Short-Term Impacts
In general, the experts said that while there may be some short-term negative impacts on Microsoft’s stock from the layoffs, it’s not likely to have long-term disappointing effects.
“Short-term market reactions, like stock dips from announcements such as layoffs, shouldn’t overshadow the company’s solid fundamentals,” said Amy Jam, who helps clients find wealth and financial success. “Microsoft’s diversified business model, strong financial position and continuous investment in innovation make it a resilient player.”
According to Jam, investing in Microsoft stock still makes sense for those focused on long-term growth.
“The company is well-established in key areas like cloud computing and artificial intelligence, which are expected to drive future revenues,” Jam said. “While layoffs might seem alarming, they are often part of broader cost-saving measures or efforts to restructure for efficiency, rather than an indicator of decline.”
Long-Term Questions
Chris Heerlein, CEO of REAP Financial, agreed about the broader signs associated with layoffs.
“If you look at Microsoft’s history, layoffs have never been a major indicator of financial instability,” Heerlein said. “Instead, they are often a sign of restructuring, where they cut costs in one area to reinvest in another.”
Heerlein said the bigger question for investors is whether Microsoft’s valuation still makes sense.
“It is a strong company, but it is trading at a premium, meaning future growth has to justify its current price,” Heerlein said. “If you are a long-term investor, Microsoft remains one of the safest bets in tech. However, if you are looking for short-term gains, the stock could see some turbulence as markets react to economic conditions and corporate restructuring.”
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