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Microsoft Cuts Pay Raises for Employees

Microsoft CEO Satya Nadella indicated in a memo that no raises will be coming this year for full-time Microsoft employees.

The Wednesday memo apparently was given to the Business Insider (paywalled), although there are also widespread media reports on it, such as this USA Today article. Media reports also had suggested that bonuses and stock compensation were getting trimmed.

USA Today was given a statement from a Microsoft spokesperson explaining the cutbacks. Microsoft is changing its employee compensation "to align with the overall market." The statement contradicted media reports that bonus and stock cutbacks were planned, too.

"While we will not be providing salary increases for our full-time salaried employees this year, we will continue to invest in our employees through promotions, bonus and stock," the spokesperson told USA Today.

An anonymous poster at the Blind careers site had stated that bonuses and stock awards were getting "slashed to previous years' averages."

Nadella had told Microsoft employees last year that it would be raising their pay, per a CNBC report. Back then, Microsoft had planned to nearly double the company's global merit budget and raise annual stock ranges "by at least 25% for employees at level 67 and under."

The cuts in pay raises are arriving shortly after Microsoft's positive fiscal Q3 earnings, announced last month, where overall company revenue was up 7%. However, Microsoft's Q3 results did show decreases in revenue for its Windows OEM segment (down 28%) and Devices segment (down 30%), which typically have been financial strengths for the company.

Back in January, Microsoft indicated that it was reacting to inflationary pressures and enacting a 10,000 jobs cut, which was expected to take place gradually through March 2024.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

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