No salary increases for Microsoft full-time employees this year.

Microsoft Holds Off on Salary Increases for Full-Time Employees in 2022

Microsoft CEO Satya Nadella announced in an email to employees that the company will not be offering salary increases to full-time employees this year. This decision comes after Microsoft provided raises to some employees in 2021. Nadella cited economic conditions and an investment in artificial intelligence as reasons for the change. Performance bonuses for Microsoft’s top executives will also be down considerably from last year.

Cost Reduction Efforts

The decision to hold off on salary increases aligns with Microsoft’s efforts to reduce costs as revenue growth slows and clients reduce spending. In January, the company announced that it would cut 10,000 jobs, or just under 5% of its workforce. Other tech companies, including Alphabet, Amazon, and Meta, have also downsized in recent months.

Compensation Changes

Last year, Microsoft nearly doubled the budget for merit increases and boosted stock allocations for certain employees due to inflation. However, this year, compensation will look more normal. “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.

Investment in Artificial Intelligence

In addition to discussing pay changes, Nadella highlighted Microsoft’s efforts to capitalize on the growing artificial intelligence market. The company announced a multibillion-dollar investment in startup OpenAI in January, which relies on Microsoft’s Azure cloud to run its viral ChatGPT chatbot and provide large language models such as GPT-4 to power apps from Microsoft and other companies. Microsoft’s capital expenditures will increase quarter over quarter due to investment in Azure AI infrastructure.

• Microsoft will not offer salary increases to full-time employees in 2022
• Performance bonuses for top executives will be down considerably from last year
• The decision aligns with Microsoft’s efforts to reduce costs as revenue growth slows and clients reduce spending
• Microsoft nearly doubled the budget for merit increases and boosted stock allocations for certain employees last year due to inflation
• Microsoft announced a multibillion-dollar investment in startup OpenAI in January to capitalize on the growing artificial intelligence market