No Salary hikes for Microsoft employees this year, Nadella reveals through an e-mail
Microsoft has dealt a significant blow to its employees by announcing that it won’t be increasing the salaries of its full-time workforce this year. However, the company will still provide bonuses, stock awards, and promotions.
In an internal email sent on Wednesday, Microsoft CEO Satya Nadella expressed the company’s commitment to driving a significant shift in the AI landscape in this new era. Despite facing global macroeconomic uncertainties, Microsoft is working to accomplish this in a dynamic and competitive environment.
In the email, Nadella mentioned that there are significant variations in economic circumstances this year, encompassing aspects such as customer demand, the labor market, and the necessary investments for the upcoming phase of innovation.
According to a report from BQ Prime, which had access to an email sent to all Microsoft employees, it was stated that salary increases will be provided for specific hourly or equivalent positions, but full-time employees will not receive any salary increases this year.
Nadella stated in an email that although the bonus and stock award budget will be maintained this year, it will not be overfunded to the extent it was last year, and will be brought closer to historical averages. The emphasis will remain on acknowledging outstanding performance with generous rewards, but managers will need to differentiate pay for performance within their allocated budgets to accomplish this.
He also added in the email that, “The senior leadership team and I will be subject to the same principles, as evidenced by the absence of salary increments and significantly reduced annual performance-based bonuses for the SLT compared to the previous year.”
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The professional networking platform LinkedIn, which is owned by Microsoft, has announced plans to reduce its workforce by laying off 716 employees, accounting for approximately 3.5% of its total staff. Additionally, the company intends to shut down its job application platform focused on China.
In response to a deteriorating global economic outlook and reduced demand, LinkedIn has implemented a new strategy. This follows the previous layoff of staff from the recruiting division in February, but the exact number of employees affected by the recent round of job cuts is unclear. According to a Reuters report, LinkedIn, with a workforce of approximately 20,000 individuals, is the subject of the downsizing initiative.
Amidst a global economic outlook that is becoming weaker and a decline in demand, LinkedIn has taken action. In February, the social network, which primarily focuses on employment, had to dismiss employees from its recruitment department. According to a Reuters report, LinkedIn has managed to maintain revenue growth consistently every quarter for the past year despite having approximately 20,000 employees.
According to the report, CEO Ryan Roslansky stated in a letter to staff that the company is eliminating positions in the sales, operations, and support teams to simplify operations and remove unnecessary layers, enabling faster decision-making. In an email, he stated that due to greater market and customer demand fluctuations and to better serve emerging and growing markets, the company is increasing its use of vendors.
In the meantime, LinkedIn announced that its job search app in China, InCareers, will be phased out by August 9, 2023, citing a difficult operating environment. The company explained to website users that despite making progress, InCareer faced strong competition and challenging macroeconomic conditions, ultimately leading to the decision to discontinue the service. However, the company plans to maintain its presence in China to help foreign businesses recruit and train employees in the region.
Like other major tech companies such as Microsoft, Facebook’s Meta Platforms, and Google’s Alphabet, Linkedin has also resorted to cutting its workforce. In the past half-year, Layoffs.fyi reports that over 270,000 technology-related jobs have been eliminated worldwide. Meta Platforms has let go of 21,000 workers, while Alphabet has laid off 12,000 employees.
Microsoft announced in January that it would terminate around 10,000 staff members, equating to approximately 5% of its worldwide workforce. CEO Satya Nadella explained in a blog post that businesses worldwide are becoming increasingly cautious due to a recession in some parts of the world and an anticipated one in others. As a result, Microsoft aimed to adjust its “cost structure” to align with its declining revenue.