Microsoft CEO Satya Nadella (right) took a major step this week to put his imprint on the software giant as it shifts focus from traditional PC software to cloud-based products. Cloud computing moves data storage from individual machines to computer servers that are accessible just about any time at any place with Internet access.
Nadella announced plans to cut as much as 14 percent of the workforce over the next year. In a memo to employees Thursday, he said the vast majority of affected employees will be notified within the next six months.
Although it's the third-highest performer in the Dow Jones industrial average this year with a return of 19.5 percent, Wall Street analysts remain split on the stock. The majority rate Microsoft a "hold."
Rick Sherlund of Nomura is among those who maintains a buy rating. "We are hopeful Mr. Nadella might also announce a greater share repurchase program, which is another lever to enhance earnings and shareholder value," he wrote in a note to clients.
Investors will gain more insight on Tuesday when Microsoft releases fourth-quarter results for its 2014 fiscal year.Associated Press