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Microsoft’s shares plunged in after-hours trading on Thursday after the company said it would cut its dividend by 25 percent.
The move comes amid mounting pressure on Microsoft from investors worried about Microsoft’s business performance, amid the fallout from the massive Microsoft shutdown.
“This is an extraordinary time to be investing in Microsoft,” said Mark Mahaney, founder and CEO of Mahaney Management.
Microsoft shares fell by more than 5% in after hours trading on Friday.
Analysts say Microsoft is likely to cut the dividend, which is the company’s most significant quarterly payout since its $13 billion buyout of Microsoft in 2001.
Microsoft stock has lost almost half its value since Microsoft’s buyout in 2001, and investors are worried that Microsoft is no longer competitive in a rapidly changing market.
Investors are concerned that Microsoft has not kept pace with consumer demand for software and services.
The Microsoft layoffs were announced Friday in a letter to employees, with the company saying that some employees were being laid off in a “temporary and voluntary” manner.
Microsoft also announced plans to hire another 1,500 people, saying it will add another 500 employees to the company in the coming weeks.
The company said in its statement that its CEO Satya Nadella will be stepping down from his position on November 1.
Microsoft has faced criticism for its lackluster financial performance, as the company has been under pressure to increase revenue.
But analysts say the layoffs are a stark reminder that Microsoft’s financial performance has been weak over the past few years.
The stock was down more than 11% over the last three months of 2017.
“We think the company is under a lot of pressure and the CEOs have done an excellent job of putting their personal financial situation in perspective,” said Andrew Cushman, senior director of Microsoft Research in a phone interview with CNBC.
“The real question is whether it’s sustainable in the long run.”