Microsoft Corp. (Microsoft (MSFT)) stock fell more than 1% on Monday after the company announced another round of layoffs, even as technology stocks rallied. The Nasdaq gained 1.83%, and the S&P 500 rose 0.83%.

4,800 Job Cuts

Microsoft will cut about 4,800 jobs, or roughly 2% of its workforce, as it resets its Xbox division. The company described the gaming industry as "facing the most severe hardware crisis in its history."

According to reports, about 3,200 cuts will come from Xbox, including 1,600 immediately and another 1,600 over the next year. The remaining layoffs will affect Microsoft's commercial division.

Microsoft told employees the roles were "not being replaced by AI," but said "AI is changing how work gets done."

Xbox Chief Executive Asha Sharma said the "business today is not healthy," citing "margins that are 3-10x lower than comparable platform and publishing businesses." She called for a "reset" amid weaker hardware demand, higher component costs, and the growth of online gaming.

The cuts come three years after Microsoft closed its $75 billion Activision Blizzard acquisition. Sharma said Xbox will offload four gaming studios and cut remaining units, including Activision, Blizzard and Minecraft maker Mojang.

Microsoft Technical Analysis

Microsoft is trading near its 20-day simple moving average of $384.78. However, the stock remains 5.5% below its 50-day SMA of $406.63 and 13.6% below its 200-day SMA of $444.81. That setup suggests the longer-term trend remains under pressure.

The relative strength index stands at 46.47, indicating neutral momentum. The reading does not point to either an overbought or oversold condition.

A death cross formed in January, with the 50-day SMA moving below the 200-day SMA. That pattern often signals persistent long-term weakness.

Key resistance is near $433. Key support sits around $349, close to the stock's 52-week low of $349.20.

Earnings And Analyst Outlook

Microsoft is expected to report quarterly results on July 29.

Wall Street expects earnings of $4.23 per share on revenue of $87.61 billion, compared with earnings of $3.65 per share and revenue of $76.44 billion a year earlier.

Analysts maintain a consensus Buy rating with an average price forecast of $559.40. Recent research includes Stifel lowering its price forecast to $400 while maintaining a Hold rating, TD Cowen reiterating Buy with a $540 price forecast, and Cantor Fitzgerald maintaining an Overweight rating with a $502 price forecast.

Microsoft MarketDash Edge Rankings

Microsoft scores highly on Quality but weakly on Momentum, reflecting strong underlying fundamentals despite a softer technical picture. Its Value and Growth scores remain in the neutral range.

ETF Exposure

Microsoft remains one of the largest holdings in the Vanguard S&P 500 Growth ETF (VOOG), iShares Russell Top 200 Growth ETF (IWY) and SPDR S&P 500 ESG ETF (EFIV). Large fund flows into these ETFs can influence demand for the stock.

Microsoft Price Action

Microsoft shares were down 1.27% at $385.54 at the time of publication on Monday. The stock is now nearly 23% over the past 12 months.