Microsoft puts the freeze on employee salaries, CEO pay still as hot as ever
- Reference: 1683806911
- News link: https://www.theregister.co.uk/2023/05/11/microsoft_pay_freeze/
- Source link:
In an email to workers, shown to The Reg by Microsoft insiders, CEO Satya Nadella delivered the bad news, saying the company is locked in a "competitive environment while also facing global macroeconomic uncertainties."
"To remain a consequential company, we must maintain a leadership position in our at-scale businesses of today, generating enough yield to invest and lead in the next wave, while staying on the frontiers of both performance and efficiency. That is the context in which we're making decisions and investing in our people, our business, and our future."
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Nadella pointed to "significant investment in compensation" last year that staff received, which included increasing the "annual stock opportunity." This was afforded by banking healthy profits in the pandemic as more businesses embraced the cloud.
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"This year the economic conditions are very different across many dimensions, including customer demand, the labor market, and the investments required for the next cycle of innovation. Given this, we fund our compensation commensurate with the overall market," Nadella writes.
"While we will have salary increases for certain hourly or equivalent roles, we will not have salary increase for full-time salaried employees this year."
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The blow for staff comes just weeks after Microsoft released financial results for Q3 of its [5]fiscal 2023 ended March 31 , showing the organization made a net profit of $18.29 billion, up from the $16.72 billion recorded earlier in the year. Revenue growth slowed considerably but was maintained, swelling from $49.36 billion to $52.85 billion.
For the nine-month period, Microsoft reported revenues of $155.7 billion versus $146.4 billion in the corresponding period of 2022. And it recorded net income of $52.28 billion, albeit down 6.6 percent year-on-year.
[6]Sonatype axes 14 percent of staff, reminds them not to talk to the press
[7]Miffed Googlers meme on CEO's $226M pay award amid cost-cutting campaign
[8]Cloud slowdown hits Amazon as orgs look to rein in cost
[9]IBM pauses counting its billions to trim Red Hat staff
[10]Meta's Zuckerberg paid $27M in 'other' compensation for 2022
Shareholders aren't going to starve here. Neither are Microsoft's workforce, where the average annual pay was a little more than $190,000 last year, but nobody wants to work harder each year for little or no additional reward, especially against the backdrop of inflationary increases for their own households.
Perhaps Microsoft thinks the industry is headed for a longer and deeper downturn than first perceived, or perhaps it is being overly cautious so Wall Street doesn't get any nasty surprises.
Nadella himself was awarded almost $55 million for his service in fiscal 2022, up 10 percent on the compensation he received in 2021. No doubt he'll take a hit this year too, right? Right?
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Microsoft announced the [12]redundancy of 10,000 staff in January, having recruited heavily during the pandemic. It is not alone – [13]Salesforce , [14]Google , [15]Amazon , [16]Meta and many others are also lightening their payroll.
According to data tracker Layoffs.fyi, 192,000 people have been chopped from technology businesses so far this year. ®
Get our [17]Tech Resources
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[5] https://www.microsoft.com/en-us/investor/earnings/fy-2023-q3/press-release-webcast
[6] https://www.theregister.com/2023/05/10/sonatype_job_cuts/
[7] https://www.theregister.com/2023/05/04/googlers_upset_with_ceos_226m/
[8] https://www.theregister.com/2023/04/28/cloud_slowdown_hits_amazon_as/
[9] https://www.theregister.com/2023/04/24/ibm_red_hat_layoffs/
[10] https://www.theregister.com/2023/04/18/metas_zuckerberg_paid_27m_in/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZF0RIdIUv-bpZUPTeR-W4AAAAEc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2023/01/18/microsoft_job_cuts/
[13] https://www.theregister.com/2023/01/04/salesforce_7000_job_cuts/
[14] https://www.theregister.com/2023/01/20/google_to_chop_12000_employees/
[15] https://www.theregister.com/2023/01/20/amazon_job_cuts_costs/
[16] https://www.theregister.com/2023/03/14/meta_10000_jobs_cut/
[17] https://whitepapers.theregister.com/
Re: I wonder…
Why cant you accept the simple fact thaat leadership lies ?
Everything about their work is a lie, at most companies they are the ones who have the least skills related to the core bueiness. Nadella for example has no qualifications or skills relating to software analysis or development. Another perfect exampel of this is Balmer, he would never have the skills to contribute if he became anonymous and had to work at the entry level.
They arent leaders, they are simply opportunists who take money because they can, just like Putin takes money because he can, not because of merit or any other measure.
Re: I wonder…
Hmmm - not a bad effort.
There's a [1]guide which will help you do better next time.
[1] https://www.theregister.com/2001/01/12/how_to_write_a_flame/
Maybe there is something else in this thinking. The people doing these jobs are in short demand so they get paid more so how do you turn that round? If you are paying them more then the likely option for them is to retire early making demand even higher. If they all get on the same page (as we have seen with recent redundancies) and start stagnating wages you now create a situation when demand isn't as high because people have to retire later and what better way to do it than while inflation is very high. It's not like Microsoft can't afford these pay rises. They did it last year and profits are still up 2bn. Just a thought.
Will one day a CEO claim he or she has macroeconomics certainties?
Make lots of money, pay your staff well, foster loyalty trust and increase productivity. Increasing your profit and revenue and then saying we can't increase your reward for doing that just doesn't cut it. Nor does it make any real sense.
Yes shareholders I know, but am I naively missing something else? Do they really think that revenue and profit are going to be obliterated in the near future?
"While we will have salary increases for certain hourly or equivalent roles . . ."
Equivalent roles.
Like CEO ?
He's paid by the hour, isn't he ?
Or is it by the minute ?
I wonder…
… whether Nadella wrote the email himself or just asked his Outlook AI bot to knock up a message to staff telling them there’s no money left?