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Microsoft, the tech giant, will not be increasing salaries for its full-time employees this year, reported on Wednesday. Additionally, the company is reducing its budget for bonuses and stock awards. In the information given by CEO Satya Nadella, it was mentioned that the company had made a considerable investment in compensation last year due to market conditions and company performance, which almost doubled its global merit budget. However, Nadella added that the economic conditions this year are vastly different across many dimensions.
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Last year, due to a slowdown in demand caused by an economic downturn and concerns about a recession, tens of thousands of layoffs were announced across the technology sector. In January of this year, Microsoft announced that it would also be letting go of 10,000 workers.
Satya Nadella communicated with employees, stating that the company is currently experiencing a period of significant change. While some customers increased their digital spending during the pandemic, they are now looking to optimize their digital spending and do more with less. Additionally, organizations in every industry and geography are being cautious due to some parts of the world being in a recession and other parts anticipating one.
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Moreover, Satya Nadella mentioned that the company needs to strive to deliver results while investing in its long-term opportunity amidst the current context. He added that Microsoft will align its cost structure with its revenue and customer demand. Nadella stated that the company is making changes that will result in a reduction of the overall workforce by 10,000 jobs by the end of FY23 Q3.
