By email on Wednesday, Microsoft CEO Satya Nadella informed employees that the company will not increase salaries for full-time workers.
Microsoft’s efforts to cut costs are in line with this move as revenue growth slows and customers cut back on spending. The software company announced in January that it would lay off 10,000 workers, or just under 5% of its workforce. In the past few months, other tech companies like Meta, Amazon, and Alphabet have also reduced their workforces.
Microsoft nearly doubled its budget for merit raises and stock allocations for certain employees last year as inflation swept through the economy. Compensation will appear more consistent this year.
“We will maintain our bonus and stock award budget again this year, however, we will not overfund to the extent we did last year, bringing it closer to our historical averages,” Nadella wrote in the email. Microsoft did not immediately respond to a request for comment. Insider reported on the message earlier.
Nadella said performance bonuses for Microsoft’s top executives will be down significantly from a year ago.
In April, Microsoft CFO Amy Hood said year-over-year revenue growth in the current quarter would ease back to 6.7% from 7.1% in the initial three months of the year. The organization additionally called for working costs to become under 2%, contrasted and 7.4% growth in the first quarter.
In addition to his remarks regarding compensation, Nadella emphasized Microsoft’s endeavor to profit from the expanding artificial intelligence market.
“We are clear that we are helping drive a major platform shift in this new era of Al, and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties,” Nadella wrote.
OpenAI, a startup that uses Microsoft’s Azure cloud to run its viral ChatGPT chatbot and provide large language models like GPT-4 to power Microsoft and a variety of other companies’ applications, received a multibillion-dollar investment from Microsoft in January.
Microsoft’s capital expenditures would rise quarter by quarter as a result of investments in Azure AI infrastructure, Hood stated last month.