The tech giant will not increase the wages of full-time workers. This was recently announced by Satya Nadella, CEO of Microsoft, in a message sent by email to the firm’s employees. In the text, leaked this Tuesday by Business Insider, Nadella places this measure within the context formed by the consequences of the advance of AI in the technology industry and by macroeconomic uncertainties.
It was not enough. This decision comes one month after the performance review process began, which determines potential bonus pay based on worker performance. Additionally, Microsoft takes this measure four months after, in January, the company announced the layoff of 10,000 employees, approximately 5% of its workforce.
Restructured bonuses. In relation to the bonuses, Nadella assured that in 2022 “an important investment” was made due to market conditions and the performance of the company, almost doubling the budget allocated by Microsoft to these bonuses. However, while the billionaire ruled out removing these payments, he did confirm that the firm would not overfund them at the same level as last year.
In addition, the CEO of Microsoft indicated that there will be an “absence of salary increases” among managers, as well as a reduction in the annual performance bonus for the SLT team (Senior Leadership Team, in its acronym in English).
More and more. On the other hand, although Microsoft obtained almost 53,000 million dollars in the first quarter of 2023, Amy Hood, Microsoft’s financial director, indicated that in the second quarter of the year “year-on-year growth” would decrease from 7.1% to 6.7%, as recently reported by CNBC. This means that, despite the fact that revenues exceeded initial expectations, Microsoft wants to ensure that it obtains the same capital -or more- through personnel cuts and modification of the bonus policy.
The AI race. Nadella’s identification of the development of AI as one of the elements that have influenced the decision not to increase the salary of full-time workers also points to the strategic nature of this technology for Microsoft. In this regard, in January, Microsoft announced a “multi-million dollar” investment in OpenAI.
The goal is for the organization that created ChatGPT, which uses the Azure cloud computing platform, to develop language models to power Microsoft applications.
Crisis 2.0 It seems that Microsoft seeks to equip itself well to leave as soon as possible the crisis that has hit the technology industry for a long time and strengthen its position in the market. In this sense, other large technology companies have suffered the consequences of elements such as inflation, the rise in interest rates or the phenomenon of “overcontracting”.
Layoffs ‘tech’. We are talking, for example, about Meta, Amazon or Salesforce, three firms that have carried out massive personnel cuts and are modifying their teleworking policy. In fact, some companies have removed the option of remote work: that was one of the first decisions Elon Musk made after taking control of Twitter.
Giant fight. In short, the big technology companies want to overcome the crisis in the sector and, at the same time, advance positions in the race for Artificial Intelligence, a fundamental element in the development of the ‘tech’ industry. It seems that the pocket of the workers in this area does not matter in the face of such a competition of giants.
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