Microsoft skips raises for salaried employees in 2023

Kareem Anderson

Microsoft CEO Satya Nadella issued a memo to employees stating “economic conditions” as part of the reason salaried employes will not be receiving raises, he and senior leadership included.

According to an internal memo obtained by Business Insider, full-time salaried employees will still be eligible for bonuses and stock awards while base salaries will remain in place for the remainder of the 2023 calendar as the company seeks to return its employee investments back to pre 2022 levels.

Last year, we made a significant investment in compensation driven by market conditions and company performance, nearly doubling our global merit budget, and increasing the annual stock opportunity for every employee, by a minimum of 25% for levels 67 and below. We also invested more in our bonus funding, providing higher monetary rewards for more people.

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 af innovation. Given this, we will fund our compensation commensurate with the overall market.

As a senior leadership team, we don’t take this decision lightly having considered it over several months, and believe it is necessary to prepare the company for long-term success.

In addition, bonuses and stock awards will not be overfunded by the company this year as they were in previous years. Managers will still be able to award employees with high rewards, but they will need to “differentiate pay for performance within their allocated budgets.”

As for hourly employees or equivalent roles, salary increases remain in place.

Nadella’s memo comes as Microsoft continues to shed employees from its earmarked 10,000 jobs reduction announced earlier this year.