Microsoft employees who survived layoff to lose out on salary hike this year

Global tech majors from Amazon to Microsoft and Google were euphoric about digitisation accelerated by the pandemic, and ended up hiring too many people. But they failed to anticipate how quickly the demand would fizzle out once people stepped out after the pandemic, and are now succumbing to the layoff wave to save costs.

After firing 10,000 people and hundreds more from LinkedIn, tech giant Microsoft has also decided to do away with salary hikes this year.

Survived layoff but lost perks

• Although those employees who were laid off are looking for new opportunities amidst a hiring freeze, those retained by Microsoft will miss out on a raise.

• According to a report by The Verge, Microsoft employees were informed by CEO Satya Nadella via email that only hourly workers will get pay hikes.

• Apart from global macroeconomic factors, Nadella also cited the shift towards AI in a competitive environment for the decision to withhold a raise this year.

AI race scaling up costs?

• This mail comes months after Microsoft invested $10 billion in popular conversational AI ChatGPT, and added it to its Bing search engine.

• The move also triggered initiatives to develop AI by Google, Meta and Elon Musk, while they also warned about risks associated with the tech.

• As Microsoft wants to hold on to its leadership position in the market and make enough cash to invest in the next wave, it will continue to offer bonuses and stock options to employees.