No salary hike for Microsoft employees this year, announces CEO Satya Nadella
By Team Newsable | First Published May 11, 2023, 12:45 PM ISTMicrosoft has announced that it would not increase full-time employee compensation this year, but it will keep giving out bonuses, stock awards, and promotions instead. This is a significant setback for its workforce.
Microsoft has announced that the full-time employees won't be receiving a pay rise this year after letting go 10,000 workers. Due to the current economic situation, Microsoft declared that it will not be raising the compensation of its full-time employees this year.
The business will still provide its employees bonuses, stock awards, and promotions. This choice was made after the business let go 10,000 employees in January, following the same plan used by other IT firms to get ready for a challenging year.
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Microsoft has cited macroeconomic uncertainties and shifting industry dynamics “in this new era of AI” as the reason behind cancelling salary hikes. "We nearly doubled our worldwide merit budget last year after making a large investment in pay driven by market conditions and corporate success...The economic conditions this year are very different across many dimensions," Nadella was quoted by a media report.
"We will maintain our bonus and stock award budgets again this year; however, we will not overfund to the extent that we did last year, bringing it closer to our historical averages," Nadella stated in an email to workers.
Microsoft has shifted its attention to generative AI, which the industry regards as a bright point. Microsoft has been incorporating AI technology into its Office products and search engine Bing in partnership with ChatGPT developer OpenAI, which has also gotten billions of dollars in financing from Microsoft.
The decision to postpone salary hikes follows Microsoft's early-year layoffs, which resulted in the termination of more than 10,000 employees. 559 employees from the company's Bellevue and Redmond locations were let go on March 27. Due to plans to shut down its employment app in China, group company LinkedIn lost roughly 716 positions on Tuesday.
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