Non-executive ‘regular’ employees at Microsoft will receive one-time payments based on their role, up to 25% of their annual bonus, after the company announced record profits in the fourth quarter.
The payments (via CNBC), while welcome to employees, it may be one of the ways Microsoft is trying to boost employee morale after its role in ongoing layoffs in the technology sector.
Per CNBCThe tech giant is reportedly in a panic as it tries to retain its remaining American talent and hire more people amid pressure on the labor market following the Federal Reserve’s aggressive rate hikes.
Treating the symptoms of low morale, not the cause
While it looks good that Microsoft employees are getting what they deserve, we also worry that one-time payments will only delay an uprising. Before laying off 10,000 workers in June 2024 alone, Microsoft CEO Satya Nadella was clear in 2022 that even something as simple as increasing employee salaries is out of the question.
With revenue of $64.73 billion this quarter, including $22 billion in net profit, it seems odd that Microsoft would be eager to cut staff spending but at the same time feel compelled to show some appreciation to those who remain. It can almost certainly afford to give more than, at most, a quarter of an employee’s annual bonus, which is helpfully unquantified.
Microsoft’s annual revenue is up 16% year-over-year, and its cloud computing division alone now accounts for 44% of the company’s total revenue, up 19% year-over-year. This isn’t thanks to the growing popularity of Copilot. AI toolThe tone of our coverage of Microsoft’s Q4 report suggests that the company isn’t shrinking, just growing less quickly than company executives would like.
One-off bonuses are unlikely to keep employees who may be dissatisfied with their perceived lack of job security around for too long. It’s a tough time to be a Big Tech employee, and Microsoft may need to step up or risk having its workers leave of their own accord.