With an aim to invest in long-term opportunity, Microsoft is trying to align its spending with revenue and customer demand. As part of this exercise, the tech major has decided that no salary hikes will be granted to its employees who are on the rolls this year. However, the contract staff or hourly wagers may receive hikes. Additionally, the company is also cutting down its budget for bonuses and stock awards.
As reported by Business Insider, Satya Nadella, CEO, Microsoft, sent an e-mail to the workforce mentioning how the company had invested heavily in compensation last year, based on the performance of the company and the market scenario. In fact, it had almost doubled the global merit budget in 2022. This year, however, he stated that the economic scenario had changed forcing the company to decide against salary increments and budgeting for bonuses and stocks.
At the start of 2023, the company had announced its intention to lay off 10,000 people from its workforce. According to Nadella, organisations across sectors, worldwide, were being cautious amidst fear of recession. The reduction of the workforce at Microsoft was also a part of similar cautious measures.
Kathleen Hogan, chief people officer, Microsoft, has reportedly indicated that bonuses will be cut down heavily.
The move is expected to help prepare Microsoft for success in the long run.
