It is not doing that great really, it just sounds like it. Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value.
To illustrate, suppose they sold $100 last year, or $25 per quarter. That means they sold $26.75 last quarter [a], of which $2.41 was profit [b]. Last year it was $2.25 [c]. Inflation means last year's profit bought as much as $2.48 today [d], i.e. real profit is down 3%.
[a] 25 x 107%*
[b] 26.75 x 9%*
[c] 25 x 9%*
[d] 2.25 x 110%*
If they are giving employees raises that match inflation, I wonder if they've decided that some layoffs while keeping the raise structure the same is better for morale than no layoffs but turning the annual raise percentages down a bit.
Your competitors will pay real market for your best employees. Better to trim than spread the pain.
Their margin is still above the inflation. I wouldn't say they aren't doing great for the current economic conditions.
Layoffs though, are due to increased interest rate, which kinda correlates to losing value.