Microsoft Employees May Not Receive Salary Hikes This Year
Microsoft had announced its plans to lay off 10,000 employees earlier this year.
- An internal email by Microsoft’s CEO Satya Nadella said that the company won’t increase salaries for its full-time employees this year.
- The company will also limit the budget for stock awards and bonuses.
- The email cites the current economic conditions as the primary reason for the decision.
Microsoft employees seem to be getting a series of negative news over the last few months. The company laid off 1,000 employees in October last year as part of a structural adjustment. Again in January, the company announced its plans to lay off 10,000 employees, or almost 5% of its workforce, by the end of the fiscal year (March 31, 2023).
According to a recent internal email by the company’s CEO, Satya Nadella, Microsoft won’t increase salaries for its full-time employees this year. Further, the company will limit the budget for stock awards and bonuses this year.
As per Insider, Nadella’s email said, “We will maintain our bonus and stock award budget again this year; however, we will not overfund to the extent we did last year, bringing it closer to our historical averages.”
However, hourly workers are still eligible for increased compensation, according to the email.
See more: Google Announces 12,000 Job Cuts Worldwide Over an Email
Economic Conditions Play a Major Role in Budget Cuts
The internal email cited tough economic conditions as the primary reason for cuts in salary hikes and budgets for bonuses. “Last year, we made a significant investment in compensation driven by market conditions and company performance, nearly doubling our global merit budget…this year, the economic conditions are very different across many dimensions, including customer demand, the labor market, and the investments required for the next cycle of innovation,” the email said.
Another possible factor affecting salary hikes and budgets for stock awards and bonuses may be the company’s focus on artificial intelligence (AI). Currently, Microsoft is extensively focusing on generative AI. According to reports, the company is planning to invest at least $10 billion over several years in ChatGPT creator OpenAI. Further, it is incorporating AI into its Office products and search engine Bing.
A senior spokesperson for the company said, “We recognize that navigating both a dynamic economic environment and a major platform shift requires us to make critical decisions in how we invest in our people, our business, and our future.”
What other news can Microsoft employees expect this year? Let us know on LinkedIn, Twitter, or Facebook. We’d love to hear from you!
Image source: Shutterstock
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