Earlier this year, Microsoft announced that it will be laying off close to 10,000 employees. If that was a rude shock to many, then the existing employees are in for another one. According to a report by Business Insider, Microsoft CEO Satya Nadella has told employees that they won’t be getting salary hikes this year. Not just that but top executives also stand to earn considerably less bonus.
Global macroeconomic certainties
Microsoft has bet big on AI and made a considerable investment across it platforms. Nadella, in his email to employees, said that ““We are clear that we are helping drive a major platform shift in this new era of Al, and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties.”
According to the report, Nadella also said that the company will give out bonus and stock awards but not hikes as such. “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,” said the Microsoft CEO.
This is in stark contrast to last year when Microsoft was rather generous with pay hikes. In 2022, Nadella told employees that Microsoft had doubled something called “global merit budget.” In other words, Microsoft offered substantial hikes to employees, including mid-level in several countries. One of the reasons Microsoft had offered significant hikes last year was the rising inflation levels.
However, the global macroeconomic uncertainties are reportedly the reason behind no hikes coming Microsoft employees’ way.
Many other tech companies have also laid off employees and taken drastic cost-cutting measures. For instance, Google laid off 12,000 employees and reduced many perks that employees were entitled to. Meta, Amazon, Intel are also among some of the big names to have laid off thousands of employees.