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Microsoft Freezes Salaries for 2023

• SketchySeaBeast 3y ago
  It's kind of funny to see these announcements when their stock price is at a near all-time high.
  • zht 3y ago
    need the extra cash to for dividends/buybacks to push it to ATH
  • strangattractor 3y ago
    So the people that gain the most income from stock decide to limit the income of those who don't. So their salaries effectively increase.
    • heywhatupboys 3y ago
      [flagged]
      • refulgentis 3y ago
        anti capitalist? hardly
      • norir 3y ago
        What is with this blatant pro capitalist bulls... almost everywhere for the last two centuries
        • heywhatupboys 3y ago
          because capitalism works. Any other system, not including its moral lacks, has failed and lead to corruption and poverty. Capitalism has carried more people out of poverty in the past 30 years than any other form of progress. With it freedom has been brought
      • strangattractor 3y ago
        First time I have ever been called "anti capitalist" and I've been called many things:} Believe it or not there are employees of M$ that do not receive stock as compensation. Those of us (I include myself) that do live in the capitalist/libertarian bubble and get such things tend to forget that. These non-shareholders are also the ones most impacted by inflation and tend to work hourly. I was not trying to imply there is some grand conspiracy. I was however trying to point out how the incentives of large companies are structured and are often skewed. God forbid any of those non-shareholders try to form a union. Maybe it would be good if more people in the bubble walked a mile in some one else's shoes.
      • AtlasBarfed 3y ago
        Oh boy, the ownership society from Bush Jr. I own 100 stock and are paid 150,000 - coder I own 1,000,000 stock and are paid 1$ and 150,000 stock - CEO - CEO: "I am freezing wages" - Stock goes up 10% Year to Year (say 100->110$) - inflation was 10% coder: salary is effectively 135k, ($15k loss), stock went up 1k CEO: salary is down to 90 cents (10 cent loss), stock went up $10,000,000) HN commenter who apparently things they are some great economist but quite obviously can't do basic math: "But everyone gets to own stock!!!" So to the meat, does the employee have the option to be 100% compensated in stock? NO. The CEO is effectively compensated that way, and LOVES IT because the effective tax rate on long term capital gains is 15%. You know, I would have LOVED to have been compensated in 50% stock or some equivalent with stock options (backdate me pleeeze like the CEO of UHG got to!) So maybe I'd take your dumb comment at face value if everyone got to participate in the great executive tax fraud, but... we don't.
        • heywhatupboys 3y ago
          the employee could just buy stock for his/her wage
  • BulgarianIdiot 3y ago
    What's funny about it. Employees also get stock options.
    • mikestew 3y ago
      Stock grants, not options. Pedantry aside, those grants are being cut, too.
      • pb7 3y ago
        It’s actually not that pedantic, it’s like calling JavaScript “Java”. For stock options to be profitable the stock has go up. Stock grants are simply cash in a currency that may be more or less valuable than originally granted.
        • BulgarianIdiot 3y ago
          Employees get both options and grants, depending on their position and so on. And stock does go up. It's Microsoft. Otherwise you can... just not use the option. The purpose is to encourage employees to help the company and raise the stock. In theory at least.
          • pb7 3y ago
            Thanks for explaining it but I know how it works better than most here, hence the comment. If you get $100K in stock options at a certain price and the price doubles, you make $100K. If it stays the same, you make nothing. If you leave, you have a certain period of time to exercise or you lose your options. If you get $100K in stock and the prices doubles you make $200K. If it stays the same, you make $100K. If you leave the day it vests, you keep it. They’re not at all similar except in the fact that they’re securities. Using them interchangeably is a great sign to ignore any financial commentary from that person. I’m only here because I see this mistake in every single thread that has anything to do with compensation. Engineers need to get financial education.
            • 3y ago
  • WalterBright 3y ago
    It's still 10% below its all time high. 20% if you factor in inflation.
    • bagacrap 3y ago
      As a percentage of the SP500, it's never been higher. This is important because (a) economic performance is relative (b) the most likely thing (or at least the most advisable thing) for anyone who receives MSFT RSUs is to immediately sell them and use the proceeds to buy more diversified investments.
      • WalterBright 3y ago
        The reason people became rich off of MSFT is because they didn't diversify by selling their winner.
        • Tommstein 3y ago
          It can only go up forever!
• olliej 3y ago
  So, that means pay reduction for all employees this year right? unless there's suddenly a inflation->deflation transition?
  • bigmattystyles 3y ago
    You'll probably get a 'but your equity grew at 30%' from management as a justification. Which is BS, but it's a fig leaf.
  • giantg2 3y ago
    I've been dealing with pay reductions via inflation for years. I probably lost 7% over the past 2 years.
    • ChuckNorris89 3y ago
      IKR? A stagnating wage means you're actually taking a yearly pay cut, and inflation adjustments actually mean a stagnating wage. It was less noticeable before the pandemic because only assets were growing faster than inflation while food and goods seemed to stagnate, but now everything is booming. Consider that other professions have less bargaining power than SW devs. I'm thinking about moving to Belgium where I hear salaries are automatically indexed by inflation.
  • jollyllama 3y ago
    The deflation has begun, if you look at M2 money supply. But food is not going to decrease in price, and housing will lag. So it'll still feel like inflation, but consumer goods are already going down.
    • boredumb 3y ago
      What? They just reported 4.9% inflation this morning.
      • refulgentis 3y ago
        2nd deriv is negative and we're likely to overshoot, hence, the decision and article about it
• GalenErso 3y ago
  Reposting a comment from Reddit[1]: Microsoft has been bleeding talent for the last 5-6 years due to low compensation. It's why the SLT authorized a "correction" in pay last year that saw many people get a significant pay bump. Lots of new college hires have even stated that Microsoft's offer was the lowest offer they received. Levels.fyi tells basically the same story as well if you compare Microsoft to many other tech companies. One thing to note is that the bonus and stock award budget have been reduced from last year where it was inflated. So, it's back to normal. What is frustrating is that it's also likely "back to normal" for the executives when it should be minimal to non-existent. The pessimist in me says that this is nothing more than juicing the quarterly stats so that Satya and his directs hit their targets for their "normal" bonuses. Honestly, this is the closest I've seen the company to unionization and I'm willing to bet that efforts are going to start soon. Especially if the Q4/annual results exceed expectations. [1] https://old.reddit.com/r/technology/comments/13dveyv/microsoft_wont_raise_salaries_for_fulltime/ https://old.reddit.com/r/technology/comments/13dveyv/microso...
  • jandrese 3y ago
    Every time a company is one day telling the employees that they need to take a pay cut to keep the company "competitive" (and this pay freeze is actually a pay cut), and the next day they're doing a stock buyback and the C-Suite is giving themselves enormous performance bonuses they need to worry about unionization.
    • tombert 3y ago
      Not to sound too much like a libertarian, and I'm not against unions, but isn't this something that can be more or less corrected by a lot of engineers finding work elsewhere? It's not like Microsoft has anywhere near a monopoly on the software engineering space anymore, and most of the engineers there can probably adjust to remote work without too much of an issue. Then we get the cycle of Microsoft complaining that they can't hire enough people, and then they bump salaries up again to be competitive.
      • DubiousPusher 3y ago
• ilrwbwrkhv 3y ago
  [flagged]
  • darknavi 3y ago
    Why would you gate keep hacker culture because people want to get paid well?
  • jbirer 3y ago
    Now you can bleed them from inside by selling company data and spying.
  • steve_adams_86 3y ago
    For most people I think work is just work. The kinds of people who were into computers in the early days were arguably different than average; it was a fringe thing once upon a time. Today, it's just work. People need jobs, large corporations offer jobs. I've eschewed these companies myself, but... I'm not sure it has been so wise all the time. I could have worked at a FAANG at one point, and the offer was astronomical compared to what I typically earn. The weird part is, I don't like social media because I have kids and I don't like what it's doing to kids. Yet I have kids to take care of, and that money would have made a meaningful difference to their security. So what's the right call to make? It reminds me of Cato the Younger. He was steadfast to his virtues and principles with unwavering integrity, but it appears to have lead his life to ruin. Was it worth it? Do compromises make sense here and there? I don't blame people for wanting to work for these companies. It isn't for me, I think, but I totally get it. No one deserves mass layoffs and tanking equity because they don't have retro-hacker cred.
  • deleted 3y ago
    [deleted]
  • UncleMeat 3y ago
    Small companies also don’t care about you. Startups implode or the founders acquihire everybody so they get fat stacks and you get little.
• Apreche 3y ago
  Correct headline: Microsoft cuts salaries for 2023. Even in a good economy inflation and cost of living increases are a thing.
  • gwill 3y ago
    if you saw that "correct headline" would you understand that the amount that people see on their paycheck would be staying the same? I get where you're coming from, but the headline is clear in my opinion.
  • skrebbel 3y ago
    I never understood the idea that salaries should be expected to always be corrected for inflation, and that not doing so is somehow secretly a "salary cut". Salaries are driven by supply and demand, and individual companies (maybe not Microsoft though) can generally only afford to raise them by a given amount. If that amount is less than inflation then that's that, right? Most companies (again, maybe not Microsoft though) can't just conjure up more money out of thin air, that's not how businesses work.
    • sethhochberg 3y ago
      Presumably the business is not just leaving the prices they charge for their good/services static and saying "welp, a dollar is worth less now than it was, I guess we'll target less revenue!" Cost-of-living salary adjustments should reasonably be expected in the same way a company is reasonably expected to adjust pricing according to economic conditions.
    • UK-Al05 3y ago
      Because it is a cut. Your spending power is less. It's a real terms cut. There's a good chance they've increased their product prices by inflation as well. I mean they don't have to raise salaries, but if someone is offering me a higher rate I'm going to go. You have no responsibility to your company. Now if the entire market is telling me to take a cut, either it's collusion or software developers are simply worth less now.
• dig1 3y ago
  Yet CEO's bonus in 2022 was 20x bigger than his salary. I don't think it will be less this year either; with all-time high stock price and these "cost cuts", he will be wholesomely rewarded.
  • ClumsyPilot 3y ago
    This kind of comment woups not have been here like 3 years ago. It was an amazing journey to watch HN denisens adjust their opinions as they went from creme de la creme and 'anyone can create a unicorn tonorrow' to, you know, being basically like a plumber but for JSON.
    • pianoben 3y ago
      The secret is, we've always been plumbers. It's not a terrible comparison in some ways - plumbers are highly-skilled, scarce, and command high prices for their services. Nobody mistakes them for Capital, especially not plumbers themselves. Engineers seem to have gotten the wrong idea about themselves lately.
      • nforgerit 3y ago
        Gosh I like this comment so much. This is exactly how I felt and saw ourselves whilst sitting in hipster startup offices getting way too much money compared to the rest of society. That said, tech people in general publicly don't get enough respect or disrespect for their work.
        • WalterBright 3y ago
          > getting way too much money compared to the rest of society A good engineer can make a great deal of money for the company, far more than a plumber ever could. I.e. an engineer has leverage.
          • efields 3y ago
            The plumber at the house with an overflowing toilet sure has some leverage, too.
• Someone1234 3y ago
  Executives get most of their compensation from non-salary (stock grants). Are they sharing the pain (e.g. lower grants)?
  • WalterBright 3y ago
    In the 90's the Seattle Times estimated that 10,000 millionaires (excluding the value of their homes) live in Seattle that made their fortunes from merely being an employee of Microsoft.
• galoisscobi 3y ago
  Wondering how long it’ll take for other tech companies to copy this move and pretend that they independently arrived at these conclusions after their meticulous macroeconomic analysis.
  • pydry 3y ago
    I wonder how much illegal back channel coordination there is going on between the big tech companies on this.
    • csa 3y ago
      It doesn’t take illegal back channel coordination to play follow the leader. All it takes is one major company to pull the trigger, then the rest will follow. The hiring market during covid was wonky in a way that favored applicants, and a lot of folks who got hired were under-qualified, overpaid, or both. This is just a natural reversion to a more balanced state across the industry.
      • darepublic 3y ago
        Same thing with the housing market. Emergent behavior based on everyone doing what is best for themselves
      • mirekrusin 3y ago
        It created playground for people secretly working multiple jobs for sure. Before it was unheard of. Now had to let go some for doing it, cancelled numerous applications and interviews once investigation revealed their scam (applying through fake names, creating multiple deceiving profiles with fake activity etc). It's frankly starts to be quite difficult to hire honest full-time remote programmers now.
      • jhp123 3y ago
        If all large tech employers play follow the leader then it's not natural reversion, it's a textbook example of tacit oligopoly coordination.
• scruple 3y ago
  I wonder if this could be fallout from the ABK deal being blocked? If I understand correctly, they "owe" ABK $2.5-3B in the event that the deal doesn't close?
  • DubiousPusher 3y ago
    I think the bigger costs are/will be associated with AI plays. I would guess MS is protecting the war chest for some bidding wars.
• nineplay 3y ago
  Perhaps its a false dichotomy, but I'll take a pay freeze/cut over a layoff any day.
  • tombert 3y ago
    I don't necessarily disagree, but fundamentally I think this will lead to "anyone who can find a higher-paying job will find a higher paying job." Part of what's enticing about these "blue-chip" megatech corporations like Microsoft or Apple is that they pay good salaries. Most work at these companies is not interesting (at least it wasn't at Apple), but you stay because the pay is good. If the pay is shit, I'll take interesting work at a startup, or I'll find a place that does pay well (like Wall Street).
    • sokoloff 3y ago
      If the pay was good before, it's at least 96% of good now.
    • nineplay 3y ago
      A lot comes down to what life stage employees are in. Someone with fixed monthly costs and kids in school is not going to want to a) move and b) deal with the anxiety of working at a start up. Probably companies are banking on that.
      • tombert 3y ago
        Yeah, that's fair, though I still think that's going to selection-bias towards employees who can't really find work elsewhere. I don't know about Microsoft but certainly at Apple there were plenty of people who were pretty mediocre engineers...I certainly was the last 6-8 months I was there because I hated it so much and realized they probably wouldn't fire me.
        • nineplay 3y ago
          My cynical hot-take is that big companies don't need great engineers, they need engineers who are good enough to complete the tickets their given and move on to the next one. The great engineers I've known came up with innovative ideas that were briefly admired and then quickly squashed. A few good architects can make a difference, but the army of SWEs are just there to keep the roads rolling.
• joedissmeyer 3y ago
  From a purely financial and management perspective, this is an EXCELLENT decision. It really is a _lazy_ method to handle layoffs with excellent perception from stock holders' viewpoint. We all know how bad it looks when management executes on a situation similar to Gavin Belson firing the Nucleus team. Perception is all that most management and financiers care about anyways as long as the money keeps flowing. The people do not matter, only the money does. It is acceptable to sacrifice your people, as well as the welfare and good will of your employees, in favor of shareholder primacy anyways. So instead of doing layoffs, instead you can make business decisions that negatively impact employees to _make them want to quit on their own_. Hell... that saves a lot of money in the long run as well as a lot of time on management's end ( time = money ). Then when top or even mid talent is lost, it still doesn't matter because the "left overs" that remain still keep the business running at a "good enough" level. And that, my friends, is the key phrase on what is prioritized in all business right now ... "good enough". All that matters nowadays is the answer to the question of "good enough". For example: - Are the quality/quantity of FT employees we currently have on payroll good enough to keep the business running? - Does our invoicing/contracts/income look good enough? - Are we doing good enough to keep our competitors at bay? - Is there anything we can cut to stay good enough? - Are there good enough incentives for our employees to stay with us? - Are there good enough incentives for our CUSTOMERS to keep doing business with us? It is my opinion that the days of "expecting excellence" or striving to "be the best" is totally over for the current generation. For the most part in the tech business environment, management and market forces are only interested in keeping money flowing at a "good enough" level. On top of that, western culture seems to have forgotten what "the best" even means right now. And without even having a definition of "the best", how is it possible to be "excellent"? We are in the middle of an extremely boring time in our lives. There is a massive drop off of real talent and creativity. Top and mid talent are deciding to hold back because the incentives are few, if any exist at all. Honest improvements and true innovation will be stagnant for at least 5 more years. Boredom will be the norm for a while. Until something actually _exciting_ happens or something incredible is discovered (I have NO idea what that could be), this will be the norm for a long time.
  • DubiousPusher 3y ago
    > this is an EXCELLENT decision. It really is a _lazy_ method to handle layoffs That's one way to see it. You could also see it as a tremendous blunder. The people who will "self-layoff" are not the low producing team memebers. These are the people who know their value and have competitive even better offers elsewhere. You just took anyone with a modicum of ambition, skill or talent who was already contemplating a move and gave them a big ol' nudge to do it. People who are low producing will put up with what they have to. They may complain but they won't self select out.
• tombert 3y ago
  You know, nearly anyone qualified to work at Microsoft (at least as an engineer) is qualified to work for some yuppie Wall Street job paying obscene salaries and bonuses; I think this is going to have the selection bias effect of the people remaining are people who cannot find work elsewhere. If their goal is indirectly lay people off, I really think that they have not thought this through.
  • diversionfactor 3y ago
    Having friends and former colleagues who work in the "yuppie Wall Street job", it doesn't pay the obscene salaries you think it does, even at the major hedge funds and investment banks, even in NYC and Chicago. The number of super-high NFT development jobs is vanishingly tiny. Most jobs at trading and investing firms for developers pay the same or even less than elsewhere. Sure, if you're a Calypso or Endur or Murex specialist you can command the $300+/hr rates, but then you may be out of work for six months or more when the project finishes. There's no easy move from FAANG while keeping the high salaries, there's 1+ orders of magnitude more jobs in FAANG (or at least there were) than in high paying non-FAANG development jobs. Most development jobs pay not much more than an experienced public school science teacher, and without the job security.
    • tombert 3y ago
      Fair enough, I was thinking about companies like Jane Street, paying starting wages of about $200,000/year for engineers [1], and I've seen a few other trading places offering similar wages. When I was at Apple, my base pay was $175,000 when I left, with about $60,000/year of stock. I've never worked for Microsoft but I assume that the pay is comparable to Apple Entirely possible that the quantity of trading jobs available isn't nearly as high as something like MS though. [1] https://www.janestreet.com/join-jane-street/position/4274288002/ https://www.janestreet.com/join-jane-street/position/4274288...
      • lotsofpulp 3y ago
        Post 2008, tech companies on the west coast easily beat out financial firms in NYC/Chicago on pay to quality of life ratio, and especially on pay per hour measures. And as you said, the number of high paying jobs (in the multiple hundred thousand dollar range) in finance is much less than the number of high paying jobs in tech. It makes sense given the heavily subpar performance of financial companies relative to tech companies in the last 15 years.
• boredumb 3y ago
  HN comments about profits, CEOs, share holders and executives are increasingly resembling twitter takes.
  • heywhatupboys 3y ago
    Basically. Profiters of stocks are evil, and take advantage of the poor developers!! Why don't you own stock then, it's public? ANGER
    • vore 3y ago
      Because executives get issued an order of magnitude more stock than you could ever reasonably buy?
      • blahyawnblah 3y ago
        That doesn't prevent you from trading the stock and making (or losing) money.
        • vore 3y ago
          Sure, but there is a clear disparity between how much you make on the amount of stock you can reasonably have versus how much executives make on the amount of stock they have. The parent comment implies there is some kind of level playing field here, which there really isn't.
          • heywhatupboys 3y ago
            that is moving goalposts. The CEOs will have more stock beause they have larger wealth and earn more money.
            • oblio 3y ago
              Cool, could they start paying dividends so that I can keep my shares and get money each year instead of having to sell them?
• mikestew 3y ago
  Freezes salaries, but also dials back on stock grants and bonuses. So depending on how one views "total compensation", Microsoft is handing out pay cuts.
• bitL 3y ago
  FAANG is dying I guess, what are the next big players, likely in AI?
• gumby 3y ago
  Hmm, still doing stock buybacks and paying dividends -- so exec comp remains buoyant. Back in the early 1980s it was hard to get software companies financed: "Why invest in a company whose primary input walks out the door each evening" (i.e. has no capital assets). Obviously that was eventually sorted out, but the underlying concern was not totally bogus. If you like a company like Microsoft you can tolerate no buybacks and even a dividend cut if it means the company continues to invest in its people.
• siliconc0w 3y ago
  I predict 'big tech' employees will start to unionize to fight the collusion of tech firms laying off and cutting pay (and if you don't think they're doing this, remember they already have).
• qbasic_forever 3y ago
  Yet they're making huge stock buybacks and profits each quarter... something is fishy. This is going to royally backfire as soon as the first big tech company blinks and starts hiring and poaching frustrated engineers. The exact same thing happened in the aftermath of '08 where companies that cut and held salaries flat were scrambling in '09 to retain and keep engineers--I distinctly remember Microsoft doing an across the board increase in salary to try to stem the bleeding and attrition.
  • bagacrap 3y ago
    Yea I think they already gave up on trying to compete for talent. I mean look, they basically cancelled the Edge team and kept a skeleton crew around to customize Chromium. They can just throw money at new tech or businesses rather than growing it at home. Still, this has got to be a gut punch for employees who see $MSFT outperforming the rest of the market by a record margin.
  • asd88 3y ago
    Nah, Microsoft has been underpaying engineers in the US for almost a decade now. Their solution is just to replace one frustrated engineer leaving with three in India and that seems to be working great.
    • alephnerd 3y ago
      It's happening at other Big Tech firms as well tbh. Also, plenty of Indian Nationals working at these firms who are stuck in the immigration purgatory have started returning to India to work at the same employer's office there (albeit with a TC adjustment that is still competitive). Heck, even Big Tech and target startup salaries in India have begun reaching the $30-50k range (take a look at YC startups hiring in India for example). At this point, a lot of fresh Indian H1-B talent coming to the US are those who were stuck working at shitty outsourcing companies (talent which Indian companies won't touch), saved up money to do a random STEM masters to get the F-1, get a couple years of American work experience plus save dollars, and then return to India. Same thing happened with the Electronics industry in the 1990s-early 2000s with Taiwanese nationals leaving Silicon Valley to return to Taiwan or moving to HK/mainland China (live in HK, commute to Shenzhen/Dongguan/Guangzhou), Korean nationals returning to work for Korean companies in the 2000s-early 2010s, and Chinese nationals in the 2010s-Present returning to Mainland China.
• diversionfactor 3y ago
  And yet, at exactly this time last year: "Microsoft to Nearly Double Salary Budgets, Expand Stock Compensation" https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/microsoft-to-nearly-double-salary-budgets-expand-stock-compensation.aspx https://www.shrm.org/resourcesandtools/hr-topics/compensatio... So they are freezing after the doubling? This behavior seems skittish and an overreaction, especially given their continued profitability and high margins. Corporate executive behavior reminds me of interacting with ChatGPT: Exec: "What should I do to retain people?" GPT: "One possibility is to double your salary budget and expand stock compensation." Exec: "All my golf buddies' are cutting compensation at their companies, what should I do?" GPT: "In this situation, try freezing salaries and reducing stock compensation."
  • gigel82 3y ago
    They didn't double the salary budget, that was such a well played PR bs by MS. They doubled the "salary increase" budget for lower levels (so instead of getting a 1% increase per year, they'd give out 2% - to the lower levels). I talked with a friend at MS and they said not only are they not getting any increase at all this year, the stock and bonus are going down to (or even lower than) last year's levels (before this supposed "expansion"). Kinda sucks...
    • heleninboodler 3y ago
      Even so, getting double the salary increase last year and zero salary increase this year instead of a layoff isn't a bad deal.
      • jwestbury 3y ago
        It's a shit deal. Microsoft's compensation is already well below competitors unless you're at the partner level or higher. They absolutely haemorrhage talent at lower levels, but hang on to low performances who just can't get a job elsewhere. Last year's increases were explicitly intended to bring Microsoft's pay closer to industry standards. By now saying, "Whoops, we accidentally gave you too much," it's clear that Microsoft has no interest in paying at industry-standard levels. And to be clear: Microsoft is already laying people off. This isn't an either-or. In fact, their layoffs are probably the worst-handled in the industry, as they've been smeared across months, meaning Microsoft engineers have spent months in a state of anxiety, worried they might be included in the next batch, as each batch is only a few weeks apart. The best reason to work at Microsoft was the stability, but now they pay less and offer less stability than many competitors -- at least at Google or Amazon, you knew immediately if you were in the group being laid off. (Sources for all of this: Former Microsoft SRE. I have friends and former colleagues at Microsoft who span from junior engineers to upper-level principal, i.e. 67. Personally, I nearly doubled my income two years after leaving Microsoft for another tech company.)
• virtuosarmo 3y ago
  At least you can argue the second derivative is getting better for tech...(i.e. we're going from layoffs to just salary freezes..)
• skizm 3y ago
  Does msft do refreshers? And if so, are those also frozen?
• mywacaday 3y ago
  An effective pay cut, it will increase the rate of natural attrition without redundancy and the related negative press.
• wintogreen74 3y ago
  The alternative of lay-offs is a false one, IMO. This is an independent action because the current environment and tech skills situation says they can probably get away with it. Collusion will spread across other major employers, in parallel to lay-offs.
• givemeethekeys 3y ago
  At this point all tech employees, especially those who work at large tech firms are one big union - you're definitely getting treated like one big heard, whether you like it or not. Share your salaries, train each other, give each other confidence, and get your worth!
• ChicagoDave 3y ago
  And the IT industry thought job hopping was bad enough. Wait until the market leans towards talent again. Everyone will be accepting the highest bids. They may have erased a 5% raise this year, but lose it (and more) in new hires in a year or two.
  • ukuina 3y ago
    This assumes the pendulum will be allowed to swing back and not be held in place by AI tentacles.
• listenallyall 3y ago
  Just yesterday an HN post stated "Employers have the upper hand" and every comment called it out as being wrong, bullshit, incorrect, whatever. I guess it is possible that a ton of Microsoft employees will leave the company based upon this declaration, but I doubt it. I think yesterday's article was way more accurate than people want to admit. https://www.theguardian.com/business/2023/may/07/employees-employers-upper-hand-small-business https://www.theguardian.com/business/2023/may/07/employees-e...
• nly 3y ago
  My employer did this also (pay review was in March)...at a time of 10% inflation (I'm in the UK) and soaring mortgage costs. Lots of people are leaving as a result..jobs are still easy ish to come by and those jumping ship are still seeing gains.
• deleted 3y ago
  [deleted]
• throwaway128128 3y ago
  This is a super cost effective way to reduce their headcount. Saves on salaries plus they don't have to cut severance checks.
• tennisflyi 3y ago
  Welcome to every other job.
• paulpauper 3y ago
  just buy the stock, which keeps going up....this is effectively the same as a raise. Profit that would go to employees goes to shareholders. It's like a conservation law.
  • lolstock 3y ago
    If a raise was a gamble in either direction then sure. There are numerous aspects that could drive MSFT lower, its trading near 45% higher than January, presumably based on ChatGPT, if that enthusiasm pops you'll see a dive.
  • byyyy 3y ago
    You realize that the stock could've been bought with or without the raise? Buying stock does not magically eliminate the need for a raise.
    • NoPicklez 3y ago
      I don't think they said that. They said that as an employee you can buy the stock and see yourself a slight raise in that regard. If an internal raise isn't on the cards.
      • charcircuit 3y ago
        And with Microsoft's stock purchase plan you are incentivized to buy stock anyways.
        • astrange 3y ago
          ESPP isn't exactly like buying stock, it's more like lending the company your paycheck for a few months in return for a free 10-15% return. Which is pretty good!
          • foogazi 3y ago
            It’s the best deal in the world
• deleted 3y ago
  [deleted]
• king_magic 3y ago
  Pretty impossible to respect a CEO that takes a 10% bump but cuts off raises for everyone else. Honestly, just disgusting.
  • bluefirebrand 3y ago
    Does anyone still actually have much respect for executive levels of big corporations? All I ever see is more and more naked greed and talking down to employees as if we are idiots that cannot see through their BS. Like all of the return to office stuff. We all know it's not about "in-person collaboration", but that's the line they think we're most likely to swallow.
    • tombert 3y ago
      I've always thought they were greedy, but one thing that these recent layoffs have really illuminated for me was how utterly stupid these executives are. I guess I had just assumed that Satya Nadella and Sundar Pichai were smart guys...why else would they be in charge of these huge corporations? But then the layoffs happened, and they both gave a big song and dance about how they're "taking responsibility" (whatever the hell that actually means), and that these were "tough decisions" to fire tens of thousands of people. It shouldn't require a 10,000 IQ to think that maybe hiring thousands of more people than you actually need is a bad idea, and if they couldn't see shit like this coming, then what value are they actually bringing to company? Vague truisms and platitudes about how they regret having to uproot peoples' lives? ETA: Some of the responses might have proven me wrong. These executives might not actually be idiots, just sociopaths. My bad.
      • bluefirebrand 3y ago
        > why else would they be in charge of these huge corporations? I think this is the real key. Why are these people in charge of these huge corporations? In a world with 8 billion people they cannot be uniquely qualified for those positions, so why them and why not someone else? Nowadays I always just assume they're someone's buddy.
• jasmer 3y ago
  In year of fairly high inflation this is a big deal and I don't suggest it will go down well. To be a bit cynically Machiavellian ... 'any' kind of raise would have allowed them to at least avoid the 'no raise' kind of language. This feels like a short sighted tactic - the economy is doing 'well enough' and MS is definitely forward looking at this point, this is going to be a bit of subtle 'sand in the gears'.
  • ed25519FUUU 3y ago
    Where are these employees going to go?
    • galleywest200 3y ago
      Who says they are going anywhere? What if work quality just drops?
      • deleted 3y ago
        [deleted]
    • fsociety 3y ago
      Startups.
    • jasmer 3y ago
      That's secondary to the internal cost of demoralize 200K people.
• cat_plus_plus 3y ago
  Even the biggest corporate CEOs get confused by socialist talk and end up recreating some of socialist inefficiencies in their own companies. Why would I invest exceptional effort or take risk working on far fetched projects if exceptional success in terms of market share or profits will not be rewarded? If I am good, I can work 6 hours a day and still be the most productive employee on the team. How does one-fit-all compensation policy motivate me to do more or to stay on rather than finding a place that will pay me to be productive to my full potential?
  • bloodyplonker22 3y ago
    In China, during Mao Zedong's era, factory workers would laugh at and scorn other workers who worked harder than others. This is the direction that Microsoft is headed with their policies.
    • maxbond 3y ago
      I don't think that's a tactic unique to or originating from communist China. I've heard stories about coopers in England beating up bright sparks who worked faster than the pace the workers had settled on. I think that's just how physical laborers sometimes ensure that people are working at a sustainable pace, such that people at every stage of their career can work alongside each other without destroying their bodies. (I personally neither condemn not condone this, it seems like bullying to me so I'm inclined to condemn but I've never worked in an environment like that so I withhold judgement.)
  • BLanen 3y ago
    Socialism is when capitalism does its usual thing?
  • lakecresva 3y ago
    What if I told you that the time and effort required to develop and deploy accurate tracking metrics for every employee's individual productivity and the negative externalities that would fall out of openly stratifying worker pay based on these minutiae (worker dissatisfaction, turnover, degraded performance, poor reputation among potential new hires) would outweigh the benefit your marginal increase in motivation and job satisfaction brings to your employer?
• Firmwarrior 3y ago
  Man oh man. Microsoft really just has no interest in keeping motivated and talented people around. The brain drain is going to ramp up even more from here If you're still at MSFT: do yourself a favor and jump ship. It's a good job, but there are even better jobs out there. Just tell the recruiter when you get your new job offer that you've been drinking $5,000 a year's worth of free soda, and you'll need them to match that with a cash bump.
  • ericmcer 3y ago
    The tech job market is brutal right now, employers aren’t going to flex on their employees unless they can, and they totally can right now.
    • Firmwarrior 3y ago
      It's not as bad as you'd think, especially for someone with a big name like Microsoft on their resume Satya and his pals in the C-suite are relying on naïveté, since they know most of their employees are busy working diligently instead of weaseling up job offers all the time
      • pacaro 3y ago
        It doesn't matter either way, people have long enough memories, there will be an exodus when the job market picks up too. MS did the same thing twice while I was there (99–13) It's a good thing. It helps remind people that the company is not a person, it doesn't repay loyalty with loyalty. Your income is the bottom line of how you are valued, they've chosen to send a message to remind you of this
        • screwturner68 3y ago
          In my 20 years (not MS) we've had 2-3 temporary pay cuts during downturns to avoid layoffs -a 5% pay cut sucks but the job you save may be your own. In 20 years I've seen somewhere around 200,000 of my co-workers RIF'ed, 10,000 on the day I was hired. The company has always made it's numbers, the CXOs have always been paid more than my life's total income and yet they always ask us to do more for less. I'd like to finish out my career here but it does appear that the grass is greener and despite what I think and how I feel the company won't care and will be fine without me. Everyone should remember that.
• paulpauper 3y ago
  For the quarter that ended on March 31, Microsoft posted revenue of $52.9 billion (up 7%) and a profit of $18.3 billion (up 9%). Microsoft had $26.5 billion in cash and equivalents as of March 31. Despite the rosy results, Microsoft employees are not getting pay increases. Nadella's own pay increased 10% from 2021 to 2022, rising to $55 million. This comes off as shortsighted. If I wanted to optimize value, I would offer more incentives for employees to perform better. It's not even a political issue. Just a matter of decency and fairness.
  • lumost 3y ago
    The economy is unstable, meaning we may only make 5% more profit next year. Layoffs and pay freezes will continue. There are two ways this pans out. Either big tech is bloated, and wages will fall over time - or current big-techs will flounder as smaller firms out compete them. This happened to HP/IBM and others, why would Google or Microsoft be immune?
    • scarface74 3y ago
      So where are these smaller firms and where will they get funding in the current market? In the case of MS, is a smaller firm going to overtake Windows? Azure? Office? Are the smaller firms going to win over the risk averse enterprise companies with long term contracts with Microsoft? In the case of Google, is some smaller firm going to take over Search? The massive amount of resources to run YouTube? GCP? Google Suite? ChromeOS in schools?
    • gigatexal 3y ago
      Right. But paying people and keeping your best talent there is a business concern I thought they’d be about. Guess not. Folks will vest shares and just leave me thinks. It shows they don’t care about their people. It’s unlikely that doing even the normal raises would jeopardize the company financially. Not in the least. So… and yet Nadella gets a big raise. Why? If he’s meeting his goals it’s only because his employees helped get the company there.
    • throw9away6 3y ago
      Wages can simply stay flat and that’s a 5% decrease due to inflation
• manojr13 3y ago
  Makes sense. What's the point in pay bumps, when there is a high chance of layoff expected!
• haliskerbas 3y ago
  Capitalism working as expected.
  • pacaro 3y ago
    As the saying/bumper sticker goes. "You are not a capitalist, you are an exploited worker with Stockholm syndrome"
• iJohnDoe 3y ago
  $18.3B in profit is pretty amazing by anyone’s standard. Especially with no pay bumps following. 20-30 years from now this will be used as a reference in history as an indication of how completely fucked up the world’s economy was at this time in history. It’s a signal. It’s a warning. It’s a sign of where we are heading. Only time will allow it to unfold. The typical naysayers can only be proven wrong with time and then they will look foolish. They just don’t know it yet.
  • Zanni 3y ago
    A signal of what? What's your point?
    • raincole 3y ago
      A signal of they having skipped history class.
  • abdabab 3y ago
    > how completely fucked up the world’s economy Wasn’t economy always effed up that way? I can’t think of a time economy wasn’t driven by corporate greed to make more profit.
  • MauroIksem 3y ago
    This is literally what everyone else has been living outside of silicon valley for decades. Shitty raises, no raises, pay cuts or raises that don't keep up with inflation. This has literally always been the reply reality of the average American worker.
    • taurath 3y ago
      Give it 10 years and we'll have actual walkouts for a company that slashes worker pay in the face of huge inflation, unaffordable housing, and record profits. The older generations that still drink the company koolaid are holding back the most pro union generations ever. Its sites like this which contain illogical hero worship of the investor class that keep workers from knowing their value.
• thekashifmalik 3y ago
  I don't understand the framing here; isn't salary dependent on job competition in the market (one which is currently full of layoffs) and has little to do with company profts? Bonuses are what are usually tied to company performance. I'm simplifying, of course, but trying to understand the issue.
  • lotsofpulp 3y ago
    Prices are a function of supply and demand, including how much buyers can afford to pay. How much buyers can afford to pay is a function of profits. A business with higher profits per employer can afford to pay employees more, but that does not mean it will, since prices are still subject to supply and demand. Whether or not it is a salary or bonus does not matter, it is all part of the price the business pays for the labor.
  • hiddencost 3y ago
    Happy engineers do better work. Half the reason Google is really falling on its face right now is that management has made it clear to eng that we're not respected the way we were 10 years ago. So we no longer go above and beyond for our employer because they no longer go above and beyond for us. Doing less work is a classic and reasonable negotiating tactic for employees. Employees are counter parties to any negotiation and they're not as powerless as big companies like to make them feel.
    • propogandist 3y ago
      Outside of the ads group the majority of Google’s rest and vest workforce delivers little shareholder value
      • beebmam 3y ago
        What evidence do you have for your claim?
        • andsoitis 3y ago
• AverageDude 3y ago
  I wish there was a political party who had guts to take on these kind of people. I wish!
  • teaearlgraycold 3y ago
    Won't someone think of the poor software engineers??
    • xkbarkar 3y ago
      Haha
    • petersellers 3y ago
      Right, because Microsoft 100% consists of highly paid software engineering roles located in the US.
    • AverageDude 3y ago
      It’s not about poor or rich engineers, it’s about fairness. When people at the top do that, people at other organisations take a page out of their book at rinse and repeat. It’s corporate version of monkey see monkey do. And the worst affected will be on the lower side of salary scales.
  • onlyrealcuzzo 3y ago
    What? And force a company that has mostly employees in the top 2% to pay them even more? I'm not sure the average person cares. To force them to charge less for their product? To hire people they don't need? What are you expecting?
    • petersellers 3y ago
      You can increase the income taxes of wealthy people considerably (specifically income taxes, not business taxes). A 50%+ marginal rate will help motivate C-level execs to opt for re-investing profits into their business rather than into buybacks of their stock to boost their own personal income. At the same time you'd be helping to provide services that will benefit the lives of the bottom 90% of the country with higher tax receipts. Wealth inequality has been getting steadily worse in the US for decades, and moves like what Microsoft is doing only make that worse.
• gedy 3y ago
  This is a pay cut due to inflation. That's not a lack of a "bump"
• musha68k 3y ago
  [dupe]
• anothernewdude 3y ago
  It's like announcing layoffs, but waiting for them to jump ship instead.
• phendrenad2 3y ago
  The tech bubble implosion has a long way to go before things stabilize. Companies will go through hiring sprees and freezes all the way down. I feel sorry for fresh computer science graduates, or those with only a few years of experience, who were left "holding the bag" after the rest of us enjoyed two decades of plush tech jobs, pushing pixels around a webpage for money. We just have a supply/demand problem now. There's too much supply. Many will re-tool in some other field (pharmacy tech is looking pretty good right now), and many who stay will have to take a pay cut and/or work harder.
• korginator 3y ago
  With the rate of inflation and interest rates going up, salaried workers need a cost of living adjustment at the very least, even if we forget about a bonus or a big pay hike. This decision is unethical to full-time employees seeing the tidy profit they made. It's a clear signal to the employees not to expect any practical reward for hard work, what a great way to motivate people. This is yet another large and powerful company acting to appease the market so their stock price goes up a bit and the shareholders are rubbing their palms in glee. Now I'm off to watch "Office Space"
  • whitemary 3y ago
    > This decision is unethical to full-time employees seeing the tidy profit they made. Profit itself is unethical.
    • beebmam 3y ago
      Based on what ideology? It's polite to at least state your premises
      • latency-guy2 3y ago
        I can't say I did not fall for the bait, but I believe its a leftist troll attention seeking. Other comments left both immediately recently and over the past few days at least are all roughly the same on topics where the concern is at best minutely related
    • brutusborn 3y ago
      Alright, I’ll bite. How is profit unethical? If I sell my neighbour something and make a profit, are we not both better off?
      • mertd 3y ago
        If you are puzzled by weird economic positions of people don't read the threads about SVB's collapse.
• nine_zeros 3y ago
  If this isn't a sign that corporations have gone too far, I don't know what is. Record profits but the producers of the profit will not get living raises.
  • andsoitis 3y ago
    > Record profits but the producers of the profit will not get living raises. Employees don’t product profit. They also don’t share in losses.
• tinktank 3y ago
  Yet another attempt at an industry-wide attempt to limit and drive down salaries. Keep doing it. What goes down, goes up. And we won't forget. You need us more than we need you.
  • deleted 3y ago
    [deleted]
• VirusNewbie 3y ago
  Do people really give a shit about this? Let me put it this way, would you rather have joined at Meta a couple years ago where you got small raises or MSFT where you didn't? Hint: Stock price is way better for people who picked MSFT.
  • ralph84 3y ago
    But stock grants at MSFT are much smaller than stock grants at Meta. So unclear who made out better.
• 0xbadcafebee 3y ago
  What I really love is the bonuses that say that if you leave in less than 3 years, you have to pay them back, plus the taxes the company paid on them. If you leave early you're actually paying the company to leave.
• KiranRao0 3y ago
  My personal take: Microsoft isn't facing the same wage competition it used to, so doesn't have to increase wages.
• mise_en_place 3y ago
  Wages are always stagnant for existing employees. So it creates an incentive to job hop. Has been the case for the past decade, probably even longer.
• mixmastamyk 3y ago
  Microsoft is a cancer and has been since the 80s. Time for the younger generation to learn that. Seems they’ve been drinking the PR kool-aid the last few years and believing it. Time for some chemo/radio therapy. :-D
  • anonuser123456 3y ago
    Not a VS Code user I take it.
    • mixmastamyk 3y ago
      Wouldn’t touch it with a ten-foot pole, though I understand it is decent technically. There’s just too many great choices, that don’t require submitting to a known abuser.
• fractalb 3y ago
  My fear is that more companies will follow suit.
• glenngillen 3y ago
  I wrote up some notes on my observed realities on how mid-size and up tech companies approach compensation: https://glenngillen.com/sensible-remote-compensation/ https://glenngillen.com/sensible-remote-compensation/ Employees have a mistaken belief that if profits are high they get to share in the spoils, they won't. Shareholders are who get those rewards. Either via increased valuation, dividends, buybacks, or all of the above. The only exception to that would be employees at an exec level who get richly rewarded on the basis of doing well for the shareholders. Employees also seem to think they're entitled to receive payrises every year based on their performance, indexed/adjusted to account for CPI increases too. That's not what happens either. Your employer isn't maximising for the socially and morally optimum outcome for their employees no matter how much they tell you you're family. The maximising for return on investment. When it comes to what to pay people, or how much to increase it, it's just a huge bunch of faceless and nameless people. Some finance people will look at the numbers, look at the market, look at the company forecasts, and make a decision on how much they're willing to spend to reach their objectives. And I guess this year they've taken a look and come to the conclusion that "there's been so many lay offs, the job market it so competitive for candidates, we're already doing enough. We can maintain the status quo, any negative impact will be imperceptible, we're still expected to reach our targets. So why pay more?". It's worth learning how to advocate for yourself more strongly. If you're surprised by changes like this and having to negotiate strongly for your own salary it's because you've been the beneficiary or a hot market for a long time where external forces were driving that negotiation on your behalf. Times have changed.
  • tdrgabi 3y ago
    What resources can you recommend to learn how to advocate strongly in this context?
    • glenngillen 3y ago
      Curse of knowledge applies here unfortunately, in that it was so long ago I can’t be a reliable source on how to learn now. I recall being recommended “never split the difference” at some point and reading it and finding it useful (again, so long ago I can’t remember what’s actually in the book now). I’d also try to hunt down a peer or someone just slightly more senior than you who you suspect is better at this than you and ask them for advice. Consider treating it a little bit like a behavioural job interview though. Questions like “so for your last promotion cycle, when did you start the conversation with your boss? What did you present to them? What format/medium? How often? What was the result? What did you expect? Did you have a Plan B? How often are you exploring other options just in case?” not so much “what would you do in this situation?”. If they’re successful you’ve more to learn from what is actually working from them rather than their hypothetical ideal.
• napierzaza 3y ago
  [dead]
• BLKNSLVR 3y ago
  Don't expect any of those multitude of Teams bugs to get fixed in any kind of hurry - not that we were, but now even less so.
• buzzwords 3y ago
  I wonder if there will be a mass resignation at Microsoft as a new job might pay more. To me, it sounds like they considered this, and thought majority would not resign and go work for someone else that pays more. Some of those will not be replaced and some might need more pay. Over all this might be cheaper for MS.
• mmanciop 3y ago
  Translation: we fired a bunch of people, so did everybody. Talent’s no longer scare, and there is a large supply of jobless people that would get your position on a whim. Get fucked.
• justinclift 3y ago
  Microsoft to shareholders: "We've had our highest ever revenue, and made the largest profit ever! Yay us!" Microsoft to employees: "We're really struggling here, so please work hard! Also, fuck you!" Do they really think their employees aren't going to notice? Sources: * https://www.statista.com/statistics/267805/microsofts-global-revenue-since-2002/ https://www.statista.com/statistics/267805/microsofts-global... * https://www.statista.com/statistics/267808/net-income-of-microsoft-since-2002/ https://www.statista.com/statistics/267808/net-income-of-mic...
• isaachawley 3y ago
  Don't freeze salaries. The best people leave. The salary freeze is bad enough for morale, then the best people leave one by one and there's a morale hit for each one. Prefer layoffs.
• sandos 3y ago
  Weird. Here in Sweden we get, generally, a higher wage increase than normally. IT included, as far as I know. Honestly I think people would try jumping ship qiuckly if they did not get a yearly increase. On other hand, maybe thats the intended result. I guess the difference is that the compensation levels in IT here are not, and were never, close to the stratospheric levels as in the US.
• SuperSandro2000 3y ago
  So real wage decrease, CEO probably gets a few Million increase anyway
• dubeye 3y ago
  Sounds like a 'cheap' way of asking to whole workfoce for voluntary redudancy to me.
• taylodl 3y ago
  Microsoft's business performance has nothing to do with the labor market. The hard truth is the Big Tech layoffs are lowering the cost of tech labor. Rather than cutting salaries, as some companies have done, Microsoft has chosen to maintain current salary levels. Really, this is how a labor market is supposed to work.
• dahwolf 3y ago
  People, wake up and smell the coffee. A decade of interest-free money firehosing + demand explosion from COVID is over. The "normal" you cling to with double digit growth, insanely high salaries and benefits, and budgets of billions to work on stupid stuff that will never ship was never normal, it's an outlier. The overspending needs to be corrected. Markets are stagnant and their auto-growth has stopped. Now that money is expensive and inflation yet still high, it means that whatever you work on needs to have a sky high return on investment, otherwise it's simply setting money on fire. Hence everyone reallocating to AI, the only growth market. Hiking interest rates is a fancy word for planned economic destruction. It's very goal is to reduce demand. It comes with layoffs and cost cutting, as that is the thing that suppresses demand. My point being, if you're still in a well paying job, take it on the chin. This isn't the time. Sit still when being shaven.