Microsoft Corporate Headquarters in Redmond
The rocky road took another turn at Microsoft on Wednesday with more layoffs and the promise of no pay raises.
According to a new filing with the State Employment Security Department, Microsoft is laying off more of its people in Washington. But the 158 people who lost their jobs are in addition to the 10-thousand job cuts announced worldwide in January.
“The difference between losing a finger and losing an arm all at once” High-tech expert Rob Enderle says thinning the herd was never going to be quick or easy “If you can do it over time then you can assess as you’re going through and make sure the people you’re letting go, you can go without.”
Blame it on the pandemic! “During the pandemic companies went on these massive binges of hiring” Enderle says that was an overreaction to a remote working-stay at home lifestyle and it’s now time to adjust “And the end result is, we’ve got massive overruns of inventory that companies are now trying to work through (and) they’ve got more people than they know what to do with.”
Microsoft CEO Satya Nadella also announced there will be no pay raises in 2023. “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 said in a statement to GeekWire.
But this also comes one year after Microsoft made a huge investment in its employees.
“Raises are used to incentivize performance” but Enderle says tech workers are accustomed to flat salaries “You may run into some folks who aren’t as excited about working overtime while this is going on, but the impact of a salary reduction? A salary reduction can have a significant impact.”
Enderle says this now has little to do with the economy where the threat of a recession is fading, and supply chain delays are a long-gone problem in most cases.
