The tech giant has revealed that it will not raise salaries for full-time employees this year, but will continue with its bonuses, stock awards and promotions.
Microsoft has cited macroeconomic uncertainties and shifting industry dynamics “in this new era of AI” as the reason behind cancelling salary hikes. This decision comes just a few months after Microsoft laid off around 10,000 employees earlier this year.
“We are clear that we are helping drive a major platform shift in this new era of AI [artificial intelligence], and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties,” Satya Nadella, CEO at Microsoft, said in an internal email on Wednesday.
“This year, the economic conditions are very different across many dimensions, including customer demand, the labour market, and the investments required for the next cycle of innovation,” Nadella said in the email.
“As a senior leadership, we don’t take this decision lightly, having considered it over several months, and believe it is necessary to prepare the company for long-term success,” he went on to say.
“While we will have salary increases for certain hourly or equivalent roles, we will not have salary increases for full-time employees this year”, as per a report by BQ Prime, which had also seen a copy of the email that was marked to ‘Microsoft – All Employees’.
“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,” Nadella said in the email. “We will continue to emphasize and recognize exceptional performance with high rewards, and to do so, managers will need to differentiate pay for performance within their allocated budgets.”
“The same principles apply to the senior leadership team and me. This will be reflected both in the absence of salary increases and in the level of annual performance-based bonuses for the SLT, which will be substantially lower than last year.”
“It’s A Slap In The Face”
Microsoft’s decision to not raise salaries for full-time employees this year has been described as a “slap in the face” by a software engineer working with the IT giant.
Isabela Moreira, senior software engineer at Microsoft, took to social media to voice her disappointment. The US-based Microsoft employee tweeted “Microsoft isn’t doing salary increases for non-hourly workers. Time to start acting my wage and saying ‘no thanks’ to extra projects.”
When a person commented that no raise effectively amounts to a pay cut when one factor in inflation, Moreira agreed. “Exactly. Not that the merit increases we’re keeping up with inflation but this is a slap in the face,” she responded.