Leaked email from Microsoft CEO says salaried staff will not get raises this year due to macroeconomic conditions

Microsoft CEO Satya Nadella
Microsoft CEO Satya Nadella told staff the company will nix raises for full-time employees.
SeongJoon Cho—Bloomberg/Getty Images

In an email to staff Wednesday seen by Fortune, Microsoft CEO Satya Nadella told staff that, owing to economic conditions, the company will not provide raises for full-time salaried employees.

“We are clear that we are helping drive a major platform shift in this new era of A.l., and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties,” Nadella wrote. “While we will have salary increases for certain hourly or equivalent roles, we will not have salary increases for full-time salaried employees this year.”

Nadella added the company will maintain the bonus and stock award budget, but will bring it closer to historical averages, unlike last year. The promotion budget remains the same, the CEO wrote, and exceptional performance will be recognized with high rewards. Further, the senior leadership team, including Nadella himself, will also experience lower performance-based bonuses compared with the previous year.

“As a company we recognize that navigating both a dynamic economic environment and a major platform shift requires us to make critical decisions in how we invest in our people, our business, and our future,” a Microsoft spokesperson wrote to Fortune. “As part of that effort, we are funding our compensation to align with the overall market. While we will not be providing salary increases for our full-time salaried employees this year, we will continue to invest in our employees through promotions, bonus, and stock.”

Microsoft reported $52.86 billion in revenue in its quarterly earnings two weeks ago, and its prolific cloud division hit $22.08 billion in revenue, beating consensus estimates by analysts, CNBC reported.

“As a company, we must recognize that navigating both economic uncertainty and a major platform shift is a crucial time,” Nadella wrote to staff. “I am confident we can succeed: It all comes down to how we take hold of this opportunity to create meaningful benefits for every person and every organization on the planet. I’m looking forward to doing so with you.”

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