Despite being amongst the giants in the tech industry, Microsoft will not be providing raises for its full-time employees. The company has not been exempted from the current state of the economy, and CEO Satya Nadella believes that the move is necessary for the company's success.
No Wage Increase for 2023
Microsoft called this year's economic conditions "tumultuous," which has led to executives deciding not to issue compensation raises for its full-time employees. The news was announced to managers by the Microsoft CEO himself, which will then be relayed to employees.
Although, the decision only affects full-time employees and hourly employees can still ask for pay raises. Full-time employees can still receive bonuses and stock awards, as well as promotions within the company, as mentioned in Gizmodo.
Kathleen Hogan, Microsoft's Chief People Officer, stated in an email to managers that fewer employees will be getting "exceptional awards," which could mean that even if there will be bonuses, they will not be as much as they were before.
This adds salt to the wound just as Microsoft laid off over 10,000 employees this January, all while the company had a very public $10 billion investment toward OpenAI in order to move forward with its AI projects for the AI race.
Reports also say that Microsoft Satya Nadella's salary increased by 10% to $55 million last year. He stated that as a senior leadership team, they don't take the decision lightly and have been considering it for several months. Ultimately, they decided it was necessary for long-term success.
Just last year, the tech giant was promoting a salary raise and rewards for its employees. This was after a poll was conducted which showed that only 66% of Microsoft's employees were happy with working in the company.
Microsoft's Struggles This Year
The company has seen a decline in profits by 12% back in January, which marks its slowest growth in six years. The company believes that this will continue as they cut costs on spending, which as reported, has affected pay raises as well as employment.
Although Microsoft saw an increase in revenue to $52.7 billion, the fall in profits has been more significant with 12% to $16.4 billion, as mentioned in The New York Times. Both statistics did not live up to the expectations of Wall Street.
Just as the company is still recovering from the 10,000 layoffs back in January, another round was conducted this May, affecting employees from different areas such as Washington State and Seattle, with 158 and 2,700 employees in each region, respectively.
A Microsoft spokesperson stated that organizational and workforce adjustments were necessary and a regular part of managing the company's business. They added that Microsoft will continue to "prioritize and invest in strategic growth areas" for the future of the company.
Microsoft is not the only one affected by the harsh economic conditions of the year. Many tech companies have also laid off thousands of employees such as Amazon, Meta, Salesforce, and as mentioned in GeekWire, even startup companies.
