After firing 10,000 employees, Microsoft has said that the full-time employees will not get a salary hike this year. Microsoft announced that it will not be increasing the salaries of its full-time employees this year due to challenging economic conditions. However, the company will still offer bonuses, stock awards, and promotions to its employees. This decision comes after the company laid off 10,000 employees in January, in line with the strategy of other technology companies to prepare for a difficult year ahead.
A spokesperson for Microsoft told Reuters that they recognize the need to make critical decisions on investing in their people, business, and future, particularly when navigating through a dynamic economic environment and a major platform shift. Microsoft has been focusing on the lucrative generative artificial intelligence, and along with OpenAI, which has received significant funding from Microsoft, has been incorporating AI technology into its Office products and search engine Bing.
“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,” a spokesperson for the tech giant said.
Earlier in the day, Business Insider cited an internal email from CEO Satya Nadella that stated that Microsoft is driving a significant platform shift in the new era of AI, amidst growing competition and macroeconomic uncertainties. Microsoft will maintain its budget for bonuses and stock awards this year but will not overfund to the extent it did in the previous year, bringing it closer to historical averages.
“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 an email to employees, which was accessed by Insider.
Like other companies grappling with economic challenges caused by the COVID-19 pandemic, Microsoft’s recent decision is not an anomaly. However, Microsoft’s investments in AI technology have paid off handsomely, evidenced by the substantial rise in the company’s stock value in recent years. In a fiercely competitive technology sector, Microsoft may need to make additional strategic decisions to secure its long-term success.