Microsoft to cut about 4% of jobs amid hefty AI bets
The company, which had about 228,000 employees worldwide as of June 2024, had announced layoffs in May, affecting around 6,000 workers. It was planning to cut thousands of jobs, particularly in sales, Bloomberg News reported last month.
The Windows maker had pledged $80 billion in capital spending for its fiscal year 2025. However, the soaring cost of scaling its AI infrastructure has weighed on its margins, with its June quarter cloud margin expected to shrink from last year.
Microsoft said on Wednesday it planned to reduce organizational layers with fewer managers and streamline its products, procedures and roles.
The Seattle Times first reported on the layoffs earlier on Wednesday. Separately, Bloomberg News reported Microsoft's Barcelona-based King division, which makes the Candy Crush video game, is cutting 10% of its staff, or about 200 jobs.
Big Tech peers, which are investing heavily in artificial intelligence, have also announced job cuts.
Facebook parent Meta earlier this year said it would trim about 5% of its "lowest performers", while Alphabet's Google has also laid off hundreds of employees in the past year.
Amazon has also cut jobs across its business segments, most recently in its books division. The company had earlier laid off employees in its devices and services unit, and communications staff.
Economic uncertainties and rising costs have triggered layoffs across sectors in Corporate America, as companies rush to streamline operations and hedge against further cost pressures.
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The Print
33 minutes ago
- The Print
In Shakti Bhog ruling, NCLT lays down precedent for insolvency of firms facing money laundering probe
The NCLT was hearing a plea for the dissolution of the Delhi-based Shakti Bhog Snacks Limited (SBSL), a subsidiary of Shakti Bhog Foods Ltd (SBFL), which has been under investigation by the Enforcement Directorate (ED) for allegedly siphoning off loan funds amounting to over Rs 3,200 crore. Legal experts, however, have questioned the judgement because keeping a firm with no viable business or assets alive solely to face criminal liability is unreasonable, especially when its promoters or decision-makers would likely face prosecution anyway. New Delhi: A company or its sister concern facing a money laundering investigation by the Enforcement Directorate can't be liquidated through the provisions of the Insolvency and Bankruptcy Code, the National Company Law Tribunal (NCLT) ruled Monday, adding that it would amount to judicial overreach. It said dissolution of the company would create a situation in which the company would cease to exist and hence escape criminal liability. Additionally, the NCLT bench noted that the dissolution of the company, when it has been listed as an accused in the prosecution complaint under provisions of the Prevention of Money Laundering Act (PMLA, 2002), would frustrate the proceedings before the Special PMLA court, which has sole authority under the Act. The NCLT was deciding the plea of one Umesh Gupta, the resolution professional of Shakti Bhog Snacks Limited (SBSL), seeking dissolution of the firm under Section 54 of the Insolvency and Bankruptcy Code, 2016. The insolvency proceedings against SBSL were initiated upon the application of Goyal Tea Agencies Private Limited, an operational creditor to the firm in 2023. In Insolvency and Bankruptcy Code proceedings, an operational creditor is the firm or creditor to which the firm owes a debt. The firm under debt is called the corporate debtor. After admitting the application, the NCLT appoints one resolution professional to conduct the proceedings on behalf of the corporate debtor, in this case, SBSL. However, even before the application was moved, the ED had opened a money laundering probe based on an FIR by the Central Bureau of Investigation (CBI). The probe agency had arrested the firm's chairman and managing director (CMD), Kewal Krishan Kumar, along with his son and nephew, who were directors in group firms. 'In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ('PMLA'), and the ongoing prosecution before the Hon'ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law. Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity,' the NCLT further noted. 'Such a consequence would inevitably frustrate the ongoing criminal prosecution under the PMLA and defeat the authority and jurisdiction of the Learned Special Court, which is statutorily vested with the power to try offences under the PMLA and adjudicate upon related attachments and confiscation proceedings,' a New Delhi bench of NCLT observed in its order on Monday. On the other hand, senior advocate Vikas Pahwa emphasised the distinction between IBC and PMLA and their application while dealing with offences conducted by a company and its directors. 'The IBC is a civil economic legislation intended for time-bound resolution or liquidation, whereas PMLA is a penal statute targeting individuals for offences involving proceeds of crime. The company, being defunct with no assets or liabilities, should not be indefinitely kept alive merely due to the pendency of criminal proceedings, especially when the alleged offence was committed by individuals in charge of the company at the relevant time. Criminal liability under PMLA is personal and can be pursued independently against such individuals, even after the company is dissolved,' Pahwa told ThePrint. He further argued that the dissolution of the firm—in this case Shakti Bhog Snacks Limited—will not prejudice the ED's investigation. 'No prejudice will be caused to the ED's investigation or prosecution by allowing dissolution. If any property stands attached under PMLA, that attachment remains unaffected. Moreover, prosecution against the company, if necessary, can proceed under the provisions of the CrPC or PMLA in its absence,' Pahwal further said. The tribunal further emphasised that, regardless of the value of the assets attached during the proceedings under the PMLA, the character of the proceedings will ultimately determine the outcome. 'This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative,' the tribunal further noted. 'The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code,' it further remarked. Section 54 of the IBC deals with dissolution of corporate debtor. However, a seasoned insolvency lawyer, Sumant Batra, stated that the pendency of a PMLA proceeding against a firm has no consequences for the company, and it's the individuals running its affairs who face consequences and criminal liability. Questioning the logic behind such a decision, Batra said that the best possible scenario would have been to set aside the assets attached under the provisions of PMLA from distribution. 'IBC does not prohibit the dissolution of a company facing criminal proceedings. There is no logic to hold back a corporate debtor's liquidation if its insolvency resolution is not feasible or the committee of creditors so decides. The pendency of PMLA proceedings has no consequences for a company. A company can't be sent to jail even if convicted, as it is the persons responsible for the affairs of the company that face consequences on behalf of the company,' Batra told ThePrint. 'At best, the company's assets that are proceeds of crime may be taken over by the State, or if a fine is imposed on it, that may have to be paid by the company. A dissolution can be safely ordered and the interest of investigating agencies adequately protected by keeping aside assets already attached with PML from distribution. Even its record can be ordered to be handed over to investigating agencies. But why stay liquidation? It would be interesting to watch how NCLAT deals with this issue if an appeal is preferred,' he further said. Also read: Backing ED probe, Delhi HC junks plea to monitor PMLA probe against IREO group, fines petitioner Shakti Bhog foods' long road to ruin Shakti Bhog foods' legal troubles began around five years ago, in 2020, when a consortium of banks led by the State Bank of India approached the CBI, alleging a criminal conspiracy and cheating by the firm and its directors, including Khurana, to the tune of Rs 3,269.42 crore. Based on the complaint, the CBI had on 31 December 2020, booked the SBFL, its CMD Khurana, his son and wife in their capacity as directors and guarantors of the company as well as some unknown public servants under section 120B (criminal conspiracy), 420 (cheating), 467 (forgery of valuable securities and wills), 468 (forgery for the purpose of cheating) and 471 (using as genuine a forged document or electronic record) of the IPC as well as relevant sections of the Prevention of Corruption Act. The ED opened an ECIR against the same set of accused on 31 January, 2021, and arrested Khurana in July of the same year. The agency followed up with more arrests, including Siddharth Kumar, Khurana's son, and his nephew, Tarun Kumar, who was the vice-president of purchase at the firm. The agency had also arrested a chartered accountant and entry operators as part of a probe. Over the course of the investigation, the agency has filed a total of six prosecution complaints, making all of them, including the firm, accused under section 70 of the PMLA. The agency has alleged that the firm and its directors diverted funds taken from loans to sister concerns of SBFL without any actual business, based on fake bills. In this process, the agency has alleged that the directors used approximately 108 dummy entities through which money was transferred with the assistance of entry operators. The insolvency professional filed the latest application for the dissolution of SBSL after discovering that the ED had sealed the firm's office. Notably, the ED has attached assets worth Rs 131.93 crore as part of the probe against the firm. In the application, the professional has stated that only SBI appeared during the meeting of the Committee of Creditors to stake a claim to the firm's assets. However, after evaluating the firm's assets and the viability of its business, the committee decided to dissolve the firm. Citing previous such judgements, the applicant pleaded that the tribunal should proceed with dissolution without undergoing the liquidation process under Section 54 of the IBC. In response to the plea, the agency submitted to the tribunal that Shakti Bhog Snacks Limited is a group company of Shakti Bhog Foods Limited and that its bank accounts were used for the rotation of funds by the director of the parent firm. 'The ED submitted that SBSL acquired and possessed proceeds of crime to the tune of Rs 97.87 crore from six group entities of SBFL, namely M/s Bhawna Portfolio Pvt. Ltd., M/s Divyarth Leasing & Finance Pvt. Ltd., M/s Divyashakti Hospitality Pvt. Ltd., M/s Fruto Fresh Industries Pvt. Ltd., M/s Pearl Agro Food, and M/s Sunanda Polymer, and transferred funds to the tune of Rs 127.81 crore to these group entities from FY 2007–08 to 2014–15 in the guise of investment and sale-purchase. It was submitted that these transactions were reflected in the books of accounts as sale, purchase, and investments and were projected as untainted revenue of SBFL and its group companies,' the tribunal noted the allegations of the agency against the concerned firm. (Edited by Viny Mishra) Also read: How ED uses publicly available info to identify money laundering, tactic behind 50% PMLA cases in 5 years
Economic Times
2 hours ago
- Economic Times
Bajaj, Ather, TVS to cut output amid rare earth magnet shortage on China restrictions
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Mumbai | New Delhi: India's top electric two-wheeler makers, including Bajaj Auto Ather Energy and TVS Motor Company , are set to cut production this month due to a prolonged disruption in the supply of heavy rare earth (HRE) magnets from shortage, now in its fourth month, is threatening to slow the sector's rapid growth, industry executives said. Bajaj Auto , India's second-largest EV two-wheeler maker, is likely to halve its output, while Bengaluru-based Ather Energy plans to scale down production by 8-10%, people familiar with the developments told ET. TVS, which has topped sales for three consecutive months, is also expected to pare three firms are grappling with the shortage of HRE magnets, critical for electric traction motors."The disruptions in the EV supply chain, particularly concerning magnet availability, continue to pose challenges in the short to medium term," a TVS Motor spokesperson said. "We are working actively to mitigate the prevailing challenges."Former market leader Ola Electric, however, said it will maintain production uninterrupted, having stockpiled rare earth magnets ahead of time."There is no impact on production because of the rare earth magnets," an Ola Electric spokesperson said, declining to elaborate four firms account for eight out of every ten e-two wheelers sold in the local market."We've started to see some production disruption on the Chetak line," said Rakesh Sharma, executive director at Bajaj Auto. "Our R&D and procurement teams are working on alternatives, which are now in advanced stages of development," he email sent to Ather remained unanswered until press time automobile industry and the central government have been holding discussions with Chinese authorities to restore supplies of rare earth elements (REEs) and magnets and also have initiated negotiations with alternative suppliers like Vietnam, Indonesia and Japan. However, the shortage is persisting."There has been no progress on resuming magnet imports from China," said a senior industry executive. "TVS, Bajaj, and Ather are the first to be hit, but the entire segment could face disruption if the issue drags on."In June, the Society of Indian Automobile Manufacturers (SIAM) had warned that if supplies did not resume soon, manufacturers could be forced to scale back output due to dwindling inventories."If the current standoff continues, the EV sector's momentum could lose steam just as it begins to scale up," a top executive at a leading original equipment maker (OEM) told ET on condition of challenge comes at a time when the electric two-wheeler market continues to gain traction. Their sales surged 34% year-on-year in the first quarter of FY26 to about 298,000 units, according to data from the government's Vahan Ola has an inventory of rare earth magnet to last at least five to six months and it's also working on alternate supply chain solutions, people aware of the company's plans said. The company may even marginally increase production in July, they said.A lesser impact on Ola also comes against the backdrop of the company's underperformance. Ola Electric slipped to third place in June for the second straight month.
Time of India
2 hours ago
- Time of India
No. 1 factor that will define whether US or China wins AI race is ..., says Microsoft President Brad Smith
Representative Image Beijing is rapidly closing the gap on the United States in the global artificial intelligence race, sparking fears that China's advancements could fuel strategic military capabilities and amplify disinformation, according to a Wall Street Journal report. Multinational banks, universities, and tech companies across Europe, the Middle East, Africa, and Asia are increasingly adopting Chinese language models like DeepSeek, signaling a shift in AI dominance. DeepSeek's AI model made headlines earlier this year when it triggered a massive U.S. stock sell-off, reportedly developed in less time and at a fraction of the cost of American counterparts. This cost-effectiveness, coupled with China's open-source AI models, is drawing global adopters. Alibaba's flagship open-source model, for instance, has spawned over 100,000 derivative models, allowing developers to customize solutions, enhancing their competitiveness. What Microsoft President Brad Smith told US Senate on AI race 'The No. 1 factor that will define whether the U.S. or China wins this race is whose technology is most broadly adopted in the rest of the world,' Microsoft President Brad Smith told a Senate hearing last month. 'Whoever gets there first will be difficult to supplant. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: One simple trick to get internet without a subscription Techno Mag Learn More Undo 'China's ambitions extend beyond economics. Military journals suggest Beijing is exploring AI for strategic advancements, raising concerns about potential unrestricted AI development if cooperation with the U.S. on safety and security falters. Such a scenario could lead to unprecedented military and societal threats, experts warn. Chna's DeepSeek vs America's OpenAI Despite U.S. restrictions on chip exports, Chinese firms have thrived, posing challenges for American tech giants like Google, Meta, and Nvidia. Nvidia alone could lose $10 billion in revenue due to restricted sales of its H20 AI chip to China, according to Jefferies. This marks a stark contrast to 2018, when U.S. investors funded 30% of the $21.9 billion Chinese AI sector, per PitchBook. U.S. companies are fighting back. OpenAI, led by CEO Sam Altman, is expanding its AI reach in Europe and Asia to maintain dominance. 'We want to make sure democratic AI wins over authoritarian AI,' Altman said in May. However, China's lower-cost models, like DeepSeek—described as 17 times cheaper yet comparable in quality by Latenode co-founder Oleg Zankov—are pressuring U.S. competitors to justify their pricing. Additionally, clients prioritizing data security are drawn to Chinese open-source models, which can operate offline, further boosting their appeal. As global adoption of Chinese AI grows, experts warn that Beijing's bots could become a powerful tool for spreading state-influenced narratives, amplifying China's global influence. The race for AI supremacy is intensifying, with far-reaching implications for technology, security, and global power dynamics.
