Microsoft's $1.2 Trillion Market Value Drop: Job Cuts and AI Spending Under Scrutiny
Microsoft cut 4,800 jobs in July 2026, primarily in Xbox and commercial sales, while simultaneously filing 2,879 H-1B visa applications. The company's stock has lost approximately $1.2 trillion in value since its peak in October 2025, a 30% decline. The article argues the real reason for the drop is not the visa filings but investor concern over Microsoft's massive $190 billion capital expenditure in 2026, mostly on AI data centers. Despite strong revenue ($82.9 billion, up 18%) and profit ($31.8 billion, up 23%), free cash flow has slipped to $15.8 billion from $20.3 billion a year earlier, as spending outpaces earnings. The layoffs included 1,600 in Xbox, which faces low margins, and were partly offset by a voluntary retirement program taken by 30% of eligible U.S. employees. The article downplays the visa controversy, framing it as a routine business practice.
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