Microsoft employees are set for a tasty bonus following record profits

Non-executive ‘rank and file’ employees at Microsoft are set to receive one-off payments based on their roles, up to 25% of their annual bonus, after the company announced record profits this Q4.

The payments (via CNBC), though welcome for workers, may be one of the ways that Microsoft is trying to boost employee morale following its role in sustained layoffs in the tech industry.

Per CNBC, the tech giant is reportedly in panic mode as it attempts to retain its remaining US based talent, and recruit yet more people, following the strain placed on the labor market after the Federal Reserve’s aggressive campaign of hiking interest rates.

 Treating symptoms of low morale, not the cause

While it may look good that Microsoft’s employees are getting their due, we’re also concerned that one-off payments will only delay any kind of revolt. Prior to the layoffs of 10,000 employees in June 2024 alone, Microsoft CEO Satya Nadella had been clear in 2022 that even something as straightforward as raising salaries for employees is out of the question.

Reporting revenue this quarter of $64.73 billion this quarter, with $22 billion of that being net profit, it seems odd Microsoft seems to be eager to cut back on personnel spending, but at the same time feels compelled to give tokens of appreciation to those that remain. It almost certainly can afford to give more than, at maximum - a quarter of an employee’s annual bonus, which is helpfully left unquantified.

Microsoft’s annual revenue is up 16% year-on-year, and its cloud computing division alone now accounts for 44% of the entire company’s revenue, marking a 19% increase year-on-year - in no part due to the rise in popularity of its Copilot AI tool. The tone of our coverage of Microsoft’s Q4 report suggests that the company isn’t shrinking, just growing less quickly than company executives will like.

It’s unlikely that one-off bonuses will keep employees that are perhaps disgruntled about their perceived lack of job security on-side for too long. It’s a difficult time to be a Big Tech employee, and Microsoft may have to do more or risk its workers leaving of their own accord.

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