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Business

Microsoft CEO Satya Nadella says employees’ salary increases are coming




Microsoft CEO Satya Nadella speaks at Microsoft’s annual shareholders’ meeting at the Meydenbauer Center on November 28, 2018 in Bellevue, Washington. Microsoft recently overtook Apple, Inc. to become the world’s most valuable listed company.

Stephen Brashear | Getty Images News | Getty pictures

Microsoft CEO Satya Nadella told employees on Monday that the company is raising compensation as the labor market tightens and employees struggle with rising inflation.

A spokesman for the company confirmed the pay rise, which was reported earlier by GeekWire.

“People come and stay with Microsoft because of our mission and culture, the meaning they find in the work they do, the people they work with and how they are rewarded,”[ads1]; the CNBC spokesman said in an email. “This increased investment in our worldwide compensation reflects our ongoing commitment to providing a highly competitive experience for our employees.”

Inflation rose by 8.3% in April, and remained high for almost 40 years. Meanwhile, the US economy continues to add jobs, and unemployment has fallen steadily, reaching 3.6% last month. Technology companies have responded with wage bumps.

Google parent Alphabet is adjusting its benefit system in a way that will provide higher wages to workers, while Amazon has committed to more than doubling the maximum basic wage for corporate employees.

Nadella told employees that the company “almost doubles the global merit budget” and allocates more money to people early and in the middle of their careers and those in specific geographical areas. He said the company is increasing annual shareholdings by at least 25% for employees at level 67 and below. It includes several levels in the company’s hierarchy of software engineering roles.

In the first quarter, Microsoft increased research and development costs, which include salary and share-based compensation costs, by 21%. The company strengthened its consumption in cloud technology as Microsoft tries to keep up with Amazon Web Services. Research and development growth has accelerated for five consecutive quarters.

While the largest technology companies have raised wages to try to retain talent, some smaller companies have implemented layoffs as the war in Ukraine and supply shortages strain their businesses. Carvana and Robinhood are among those cutting staff.

SEE: Jefferies senior analyst Brent Thill says he is positive about cloud stocks in the long term



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