Microsoft Freezes Salaries for 2023
twitter.com
twitter.com
"Microsoft to Nearly Double Salary Budgets, Expand Stock Compensation"
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."
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...
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.)
You choose, base salary is 100k and target raise is 10% two years in a row or 20% in the first year only. Do you want $120k + $120k or do you want $110k + $121k?
This involves the assumption that the "no raise" year is a one-off event to offset the double raises the previous year. It's a good deal.
Its more like
UPTO N% raise two years in a row or UPTO 2N% raise. In reality turned out to be N% raise + 0% raise.
like those ads in strip mall shops " upto 80% off"
* on select products
* conditions apply
You can say that again. I've spent last 3 months dealing with the effects of some pretty severe cost-cutting on my team. Now I recently learned my employers is going to spend billions on stock buy-backs.
That's just great news after the most recent push to increase our in-office time to increase "collaboration" ... when all of our teams are globally distributed so everything has to be Zoom meetings regardless of which chair your butt happens to be sitting in.
Anyways need to stop before this becomes more of a rambling rant. My work is also doing the occasional required week for "collaboration" but they've paused at 1 week a month for now. Have to justify this campus somehow... I like to think every manager bubbling up complaints actually got someone to listen but I'm betting they haven't changed their mind on the long term push even though we've shuttered 2 other locations in my area to consolidate people.
WSJ (article): https://news.ycombinator.com/item?id=35795299
WSJ journalist (interview): https://youtu.be/gaO4rAJEnBc
US Rep. Katie Porter (congress hearing): https://youtu.be/hIuA5MNs87A
Realistically, I doubt a SWE union is around the corner, but Alphabet does have a union that employees can join - so could your company! It seems most people think that unionizing would go poorly and result in job-loss, but it might not. It's easy for fast food companies or retail companies to close a location to lay-off anyone near a union, but if you're in the HQ as a corporate employee, you have to consider the behavior of professional unions (eg. the film writers union, currently on strike).
to shareholders : "WE LOVE YOU". we will do whatever it takes, fire employees, cut corners, kill raises, other nasty things before we let our numbers slip. We know, you are the most hedged, least impacted in market downturns. we love you. No really.
to management : "we love you. you did the right thing. Here's more money"
to employees: We love you. macro economic uncertainties .. market conditions .. platform shift .. AI AI .. labor market .. no raises this year. We love you.
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"
Profit itself is unethical.
> Profit itself is unethical.
It's a very strange thing to claim that profit is unethical. In tech companies, profit is an indication that the whole is greater than the sum of its parts — i.e. so much wealth has been created that there's an excess of it.
- people who gave money to enable the activity leading to profit (aka capital)
- people who organize the activity leading to profit (aka management)
- people who actually do the work
Obviously, each of these groups has some legitimate claim to the added value, but it's also pretty obvious that over the last 50 years or so, the balance in the economy as a whole has tilted towards capital and upper management in a way that can't really be justified on an ethical basis. (Just look at how the correlation between wages and productivity disappeared in the 1970s.)
> Just look at how the correlation between wages and productivity disappeared in the 1970s.
Isn't this explained by computerization?
The '70s? That's when Stallman was mucking around at MIT, right? Computers were happening!
Say 30 workers' productivity can now be reached by 1 worker at a computer. The company lays off 25, leaving only 5 workers. Those 5 workers are generating 150 workers' productivity for the company. But they're only getting 5 workers' salary (there has been no salary increase). Boom -- wages:productivity used to be 1:1, and now it's 1:30.
Consider how it also makes no sense FOR those 5 workers' salary TO increase significantly. Why should you pay them 30 times more than their pre-computerized peers? Their jobs may actually be easier than before, hours of indexing and searching replaced by filesystems and `grep`.
Is that unethical?
This also attacks the "we thought computers would mean we would get 2 hour workdays" meme. Equivalently to inflating their wages, why would you decrease their work hours?
These are things that, in the name of "ethics", can only be forced by unions or the government, depending on your level of adventurousness toward economic policy. (And your level of confidence in being able to arbitrate ethics. The communists were very hubristic about that one.)
You say that there are things that can only be forced by unions and governments. I agree!
We just need to keep in mind that at least some of the things detrimental to workers that happened 40 to 50 years ago were also forced by lobbyists and governments.
Do companies care? This signal has been the same for about a decade now. It seemingly does not matter if employees are motivated or not. There is profit anyway.
Winning strategy as an employee is to be a mediocre employee at multiple full time remote jobs.
Indeed, I have a RSU vesting schedule 4 years from hire. It is financially unwise to stay beyond that on-hire grant vesting period, it seems.
It depends on the exact level and how well the employee negotiated their sign-on RSUs, but most employees are going to face a compensation cliff of some sort at the 4 year mark.
They absolutely do (either in slashed jobs or benefits), they just don't get a say in it
Software engineers are some of the most priviledged workers in the west when it comes to compensation and perks. We need to stop talking about them like they are road construction workers here on HN. it is really out of touch
It's not a zero sum game, and I totally side with other professions to fight for decent working compensations.
God knows the rich won't ever pay their fair share.
> Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power [...]
You're both totally right that giving people enough money to live might increase the inflation. But that's not an option people are (rightly so) going to be happy with. "Just be miserable" is not a plan.
The current situation is completely absurd.
In addition there also is no skin in the game here, over-hiring or other blunders on core leadership competencies don't matter at all as long as "shareholder value" isn't negatively affected in the short term.
I've been one of the people hurt most by this, and I'm not happy about it either. Software Developers doing mental gymnastics to align themselves with the investor elite instead of their fellow working class Americans is some shit.
It's important to remember that if you're working for a living, you're still working class.
absolutely not.
"the social group consisting primarily of people who are employed in unskilled or semi-skilled manual or industrial work."
""Working class" is a socioeconomic term used to describe persons in a social class marked by jobs that provide low pay, require limited skill, "
comparing software engineers with factory workers, etc. is incredibly out of touch. Most SE's wouldn't survive a week in hard labor work.
Respectfully, speak for yourself. This isn't as rare, or as difficult imo, as you think it is. I'm speaking from a lot of disadvantage. It is what it is.
> require limited skill
Isn't this site usually full of people whining about smooth talkers with no skill? I know I've whined a lot about that. Also is what it is. The world is only unforgiving to those with narrow perspectives.
Generally, what you do for a living isn't as significant as what you learn and do with the experience gained. It's your choice to commit to what you do, or you can keep growing. Up to you.
> The working class is classically defined as that class which must sell its labour-power in order to survive.[0]
It does go on to define working class as essentially blue collar workers, even highly skilled ones. Which would exclude software engineering.
Though I think it should include anyone for which they aren't earning enough to eventually become financially independent through their labour. This would then include quite a number of white collar workers. Certainly there are software engineers outside the silicon valley bubble for which this is true, especially in parts of Asia and India.
A good litmus test is if you feel you should join a union then you're probably working class and if you feel secure negotiating your own pay then you're probably not any more. Though I doubt this fits a traditional definition of working class.
[0]: https://www.oxfordreference.com/display/10.1093/oi/authority...
They do work in some sense. They manage resources and dispense expertise from time to time...
> own moderate to significant controlling portions of companies
... but it's a gray area because they're also part of the owning class
Most working-class people should get their COL adjustment. It should be easily taken from excess profits from raising prices.
It's easy to mark any decision as "unethical" depending on your viewpoint. Indeed ethics are, to a large degree, highly subjective.
I might suggest that eating meat is unethical, or I might think whaling is unethical but beef farming is ok, or I might be completely ok consuming any meat since we're omnivores and meat is part of our diet. None of this is material though, and all points are equally valid, since ethics are subjective and personal.
So I've no problem with you considering this unethical, or even mentioning that you consider this to be unethical. An employee, who didn't negotiate an appropriate contract, would likely feel bad about this, and would thus maybe fall back on "unethical".
However from a business point of view it's completely ethical. The contract between an employer and employee is a simple business relationship. Their responsibilities and powers are clearly laid out. Setting increases and bonus's is clearly (for most of us) a mandate given to employers. In some cases (where unions are involved) the mandate falls over both the employer and the union.
Of course employers care about employees (in most companies anyway.) If only because a mass departure would be bad. They also have other considerations though, customers, shareholders, sustainability, future profitability and so on. They are constantly balancing many levers to try and keep "everyone happy". Usually this means the love has to be spread around a bit, not everyone is going to get everything they want.
Does this mean it's always in balance? no of course not. Currently (in the US) there's probably too much of a lean towards shareholders - both in artificially increasing stock prices, and also in prioritizing returns. In other places labor is stronger and the balance is away from shareholders. In another time, and another place, there's reasonable balance for a while.
For me personally, it's hard to feel sorry for FAANG employees, who've been living large for years and now (shock, horror) aren't going to get increases. Oh no, that 100K you're getting isn't enough? My heart bleeds for you. Said no Uber-driver ever...
It's better this way - otherwise employees at companies that make no money would have to take no salary.
That is correct, and a point many in this discussion miss.
> It's better this way - otherwise employees at companies that make no money would have to take no salary.
Not so fast. For one, companies that "make no money" eventually go bankrupt and pay nothing to nobody.
It's not "better" or "worse", paying what the market requires is simply the way things are in a free market.
In America today only 57% [1] of people have a positive view of capitalism. And that percent is only that "high" thanks to much older individuals who are probably envisioning our capitalism as it was in the past, before MBAology became the default corporate worldview. Take only 18-29 year olds, and 40% have a positive view. What do you think's going to happen as the older generation dies off?
Capitalism is not sustainable without more of society pushing back against sociopathy. Normalizing it because 'this is how big companies act' isn't going to normalize it, but simply turn people against capitalism - and ultimately bring us closer to swapping over to ["this time it'll be different"]ism iteration #73 or whatever.
[1] - https://www.pewresearch.org/politics/2022/09/19/modest-decli...
There is no sociopathy, it is a simple enterprise where someone absorbs the risk and others don't - it is collaboration.
Some companies are experimenting with other models - there's no law or force of nature saying an employee can't be a partial owner of a business.
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.
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.
These firms have colluded to drive down wages before (the "Techtopus" case), a fact that we know because they were stupid enough to put it in writing. This time there's no proof and may be no explicit agreement, but a tiger doesn't change their stripes.
Except for Failed Metaverse Inc, everyone else has grown revenue proportionally and profits decent enough.
And while last year was potentially quite good, that isn't the projection.
https://i.imgur.com/gUz6AlW.png
Employees went up significantly: https://www.wolframalpha.com/input?i=%28Microsoft+employee+c...
Revenue leveled off: https://www.wolframalpha.com/input?i=%28Microsoft+revenue%29
Profits are on a downward slope now: https://www.wolframalpha.com/input?i=%28Microsoft+profits%29
Yes, they're 50% greater than they were in 2019. The staffing is at about 1.5x what it was in 2019 too.
So, crystal ball time - what will revenue be a year from now? Will the profit per employee be lower than it was in 2019?
And if the answer is no, should Microsoft lay people off or hold off on salary increases?
The tragedy!
Their revenue and profit per employee will be at their highest points for every year until at least 2020! Who could ever bear that???
At least, thats what the illegal agreement was about last time this happened (between Apple and Google).
If any “high-performing employee” feels like they are taking a “massive pay cut” merely due to inflation, then something is wrong.
Either they were grossly underpaid to begin with (change jobs, it can be done if you’re that good and that low paid), they aren’t actually that good (so total comp package, including RSUs and refreshers, is relatively weak), or they have a warped perception of the value of money.
If a dev is pulling in 300k+ (standard, especially the +, at places like MS), and the cost of eggs, rent, or restaurant food is something they actually notice and impacts their day-to-day life, then I wish them the best of luck — they will need it.
In this case it's worse because not only are their salaries not going up, but the things nominally used to get around raising salaries (bonuses, stock) is also not going up. You trying to spin it by saying 'well they're earning 300k+ a year anyways' is not helping your point when there are plenty of junior and mid-level engineers earning far below that which are going to be most impacted.
Cutting positions was one way to correct this.
Freezing salaries is another.
If any devs hired during covid think that their salary was totally justified and shouldn’t be cut directly or indirectly, then they are more likely than not delusional. It was a frothy hiring market, and the upward pressure on salaries across the board was not healthy for the overall tech ecology, imho (the smaller companies couldn’t afford competent devs).
Note that I am actually an advocate of tech corps sharing more of the spoils with their employees, but not in the way that it happened during the pandemic. Reward competence selectively rather than randomly rewarding just being a warm butt in a seat during a hiring boom.
I have no doubt that during this “pay freeze” at MS, the star performers will still be rewarded somehow.
It seems to me you're working backwards from the position of 'Microsoft is justified in what they're doing' and then continuing to adjust your position in order to make that statement true. Given that Microsoft is still extremely valued according to their stock prices and that their earnings are higher than ever, citing market conditions as a reason to cut salaries when your market condition is positive reeks of bullshit.
Key employees and high performers will be rewarded at MS and elsewhere. It just won’t be announced in a press release.
If you want to disagree with me or think that what I say is bullshit, that’s fine. The market will have the final say. I’m just a pundit on a message board.
Imho, this move by MS, which will probably be followed by others, is just them exercising their options on their side of the labor market.
If folks don’t like it, they can leave and/or change careers.
There will almost certainly be a little bit of collateral damage, but I imagine that most of the high value-add people will be happy with their pay packages while keeping their mouths shut.
The products are all going to keep getting worse as they lose the talent to maintain or upgrade them meaningfully, but it'll take a long time for the company to fade away
During the pandemic, the market heavily favored employees. The market now favors employers.
The direction of the price of labor seems to have been more or less appropriate during each of these periods.
On a personal level, I don’t have much sympathy for folks whose worst experience in a labor downturn is simply not getting an inflation adjustment — it’s about the mildest correction in defined labor costs/benefits that can happen to them. I don’t think these folks realize how close to having no job they and/or their current peers actually are — that would really suck.
To the issue of whether MS should make this move or not (esp. given their financials), that’s a different issue. As I have mentioned elsewhere, I think that there will be quite a bit of quiet total comp boosts to favored folks — RSUs, retention bonuses, spot bonuses, promotions, “promotions” (e.g., different title, same job), etc.
Salary curves are rarely smooth and unidirectional over the course of a career. Most folks, in fact, will have a very spiky salary curve. I think many folks who came into tech after 2009 or so just haven’t seen or experienced this spiky curve, and their limiter range of expectations is showing.
OPEC suffered from exactly this problem quite early on. It only takes a few defectors of sufficient size.
The settlement was a tiny fraction of the amount of money they saved by entering the illegal agreement in the first place.
[0] https://www.theguardian.com/technology/2014/apr/24/apple-goo...
And I don't think anyone's even tried to suss out illegal market-manipulation schemes that are surely hatched at various seems-like-something-out-of-a-comic-book-but-is-actually-a-real-thing rich people secret societies and "retreats" and shit. It's wholly unbelievable that there's not a ton of that going on there, better-hidden than the ones that amount to one CEO emailing another with "let's illegally collude, LOL" (which, incredible as it seems, also happens, but at least sometimes gets caught).
Executive management aren’t workers.
It being illegal doesn't mean it doesn't happen. Or even it doesn't happen a ton.
I can't speak for MSFT. But a lot of tech companies definitely hired to banana town.
Cutting would be better than freezing salaries.
Not if they were let go before their first year, which has been the case at a lot of tech companies recently.
New hires, juniors especially, need a lot of time to onboard. Lessons in the first weeks and months of a new job will be more about company-specific tooling and minutiae, not engineering in the broader scope. Portable lessons come later, usually after you've found your legs.
Surely that depends on whether you're one of those getting cut or not.
I don't get this stuck up argument again and again Why did they hire before? As if there is some really great answer that can reveal itself by repeatedly asking this question.
> Cutting would be better than freezing salaries.
Many would like same or lower salary than being laid off. Those who looking for higher salaries can move on just like they always have.
Hint: Neither is needed for most of these big tech companies.
If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful.
Layoffs are frequently done when a company is struggling, so people seem to think it's incongruous for a company to do layoffs if they are doing well.
And that doesn't need to be the case. Many of these multi-national big tech companies have failed to move forward with layoffs in some countries because of laws that protect workers.
For example, in some countries, companies need to prove that they're struggling in order to lay people off.
A healthier company has more longevity, and a company with more longevity will hire more people in the long term than an inefficient or bloated company. I feel like your perspective does not take time horizons into account.
An issue would be that Sundar is plugged into Google and knows all the ins and outs and has the relationships that an outsider would take some time to learn/form, but on the same hand, Sundar going out into the wide world is then lacking those same things at his new company, meaning new companies might be as hesitant to hire him as Google would be to hire a new outsider CEO.
I'd be willing to do a terrible job at it for only $10M/yr. That's not what the shareholders want; they want Sundar to keep doing what is, from the shareholders' point of view, a quite respectable job, seeing the shares grow from $34 when he become CEO to $112 now for a CAGR of around 17%.
In that same time frame that Sundar was CEO and GOOG stock is up 240%, META is up 160%, NFLX is up 220%, AMZN is up 325%, AAPL is up 500%, and MSFT is up 600%. Surely these giant tech companies didn't all get lucky and get the only 5 people who could get great growth numbers from the stock market.
A layoff can at least be due to a change in direction or some departments, teams, or employees not delivering the necessary value to justify their continued employment. This is saying no one at Microsoft is delivering enough value to deserve a raise despite the company still being profitable. That is objectively not true. There are certainly people at Microsoft that deserve raises and the company can clearly pay for those raises with their billions in profit.
There is no reason to do this other than Microsoft feels it can get away with it.
[1] - https://www.microsoft.com/en-us/investor/earnings/fy-2023-q1...
Having said that, the decision probably involved more than the shareholders point of view.
And if we must truly take the perspective of the shareholders, this is a stupid move because that link between performance and compensation is the primary motiving factor for many employees to put actual effort into their job. Why should any Microsoft employee put in anything but the minimal effort at this point? Is personal pride the best remaining reason?
This is only true if Microsoft is also freezing promotions. I doubt that is happening.
It ain't a 2 variable equation, like all resources it is also driven by market. If Meta/Goog/industry is hiring at 20% higher the salaries have to go up to match or you'll see huge attrition.
Companies are legal constructs that were created to provide investors in business activities limited liability with respect to their investment in a mutual business activity. And that's it.
For their first several hundred years, companies were expected to provide benefits to their employees and the localities in which they operated in exchange for that limited liability. (And see what happened to Lloyd's of London's shareholders to understand why that is a more than fair exchange.)
If companies want to be all about "benefit for the shareholders" and to hell with everyone else, then its about time we take away the limited liability.
Good and happy employees make for repeat customers.
Shareholders come third because they will drop you for minor swings and stock price.
However if your sample is only people who are on Blind complaining, I can see how your data might be skewed in that direction.
"Mean raise for SI" is also not what the original post said. It just said "raises for most employees was between 0% and 1%". We can't exclude the higher performers.
Zero people on my team had raises below 1% (one was close). Nearly my entire team, including me, received SI for 2022. The merit lines make it clear what %MRP you'd need to be at to get a 1% raise and it is well above the norm.
If anything MS is smarter for waiting for all of their competitors to cut first. As others pointed out, they have tons of cash and really don't have to cut at all, so they get a leg up on their competitors by waiting.
They don't really need to do this, they want to.
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.
Nobody mistakes them for Capital, especially not plumbers themselves. Engineers seem to have gotten the wrong idea about themselves lately.
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.
Installing a toilet is more like wroting a bash/shell script that is 99% googleable - most people can figure it out in a weekend
Writing a whole applocation is more like doing plumbing for an industrial installation. that handles hangerous chemicals
It works like this. If I could hire bob for $10, but he produces $100 worth of value, hell yes I'm going to hire Bob. But Evil Corp sees that and thinks "damn, I want Bob to contribute $100 to my bottom line, so I'll hire him away from Bright Corp by enticing him with $20 pay.
Then, BadAss Corp thinks the same thing, and hires Bob away for $30. This process repeats until Bob's pay + opportunity cost == $100.
However, there is a point of diminishing value being added. If lots of Bobs are available, the incremental value (leverage) each one adds becomes less. There are only so many redesigns of one's database that improve productivity much.
As you can see, the more Bobs, the less they'll get paid. Until Frank comes along with a new idea for adding value, and starts the process over again.
I.e. an engineer who has a track record of delivering value can command a much higher salary. I know one who got a million dollar salary.
This is also why CEOs get paid so much. Leverage. Nadella is a prime example. As an MSFT shareholder, I'd say he was darn well worth it.
I usually find that this typically stops at something like $10 for most people. Despite people being “valuable for millions” offers for that much don’t magically seem to spring up. The people I know making a million a year typically make the company tens of millions…
Personally I feel that the "rest of society" is getting way too little money vs. us getting way too much (opinion based on the fact that profits/productivity have outgrown salaries for too long).
There is another name for it - getting shafted
When I was working at a non-FAANG for normal pay, I was basically living the exact same lifestyle as my dockworker grandfather. I could afford a house and car, wife didn't have to work, one vacation per year, moderate savings.
Same issue with GPT. It's generating low quality, poor performing, poorly designed code. Any company using it as a basis will be in trouble.
That said, this phenomenon should not be used to justify exorbitant executive compensation that is very out of line with what the positions lower on the totem pole are capable of getting. We do not need that kind of society.
Although MSFT's all time high stock price was in 2021.
This goes for all public corporations. Anyone can get a piece of the action by buying some stock in them.
As for the size of Nadella's compensation package, speaking as a long term MSFT shareholder Nadella has earned it. You might want to check out a graph of MSFT's stock price before and after Nadella became CEO.
You know, the people who actually built and sold the products?
Microsoft has historically had low salaries - because the money was made from the stock options.
"Of this total $2,500,000 was received as a salary, $10,066,500 was received as a bonus, $0 was received in stock options, $42,269,560 was awarded as stock and $110,250 came from other types of compensation."
Set this against the several hundreds of billions added to the MSFT value during his reign, and his compensation is the bargain of the century.
As a longtime MSFT shareholder, Nadella's compensation is coming out of my pocket. I don't begrudge him a penny of it.
I'll let you in on a secret. Regardless of what the official policy is for a company, if you feel you're undervalued, and you're right, you can negotiate the pay you feel you're worth. And if you cannot reach an agreement, there are plenty of other tech companies. In the Seattle area, there's Amazon and Google, for example. You wouldn't even have to move.
Why are you treating him differently than the rest of the employees?
So, y'know. Not the 58% of Americans who are living paycheck-to-paycheck.
And, um...you know what you call people who buy a stock at its all-time high?
Suckers.
You can buy fractional shares from robinhood.com.
> Not the 58% of Americans who are living paycheck-to-paycheck.
I've known many of them, with a McMansion and his&her new cars in the driveway.
> you know what you call people who buy a stock at its all-time high? Suckers.
You're in luck, MSFT is 20% below its all time high.
This is an incredibly uncharitable way to frame the parent comment.
> If all the CEOs in the world were forced to make $0, it will not meaningfully change the amount of money in workers' pockets.
That's just not true.
> That's just not true.
But its not far from wrong -- cutting a ten million dollar a year expense and putting it to worker pay will not make workers rich in the colloquial sense.
I wonder if people read what they type before they hit "reply"?
It’s about equality, attributing it to ‘envy’ reeks of entitlement.
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.
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
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
And that doesn’t include meaningless “equity” in a private company.
Or you could take a tiny pay cut but go 100% remote and move wherever you want in the world
Another thing to consider is that most companies are working on much easier stuff than the type of problems you face at a company like Microsoft. My first tech job, we had an ex-Microsoftie there. The dude basically just sat around surfing the web all day, worked maybe 4 hours total between Monday and Friday. He was still the most productive person at the whole company, and he taught us all a lot in the process.
That’s not meant to be an insult. I spent over 2 decades as your average CRUD developer and only fell into BigTech in 2020 because I added cloud to my toolbelt
Now I wouldn’t have move from my big house in the Atlanta burbs where I was making $160K for the mid 200s. And the only reason I was even interested in my current job was that it was permanently remote.
…great people don’t want to be held back by average people.
If things turn around again hopefully people remember this. This wasn't a shared hardship between leadership and the line engineers.
This isn't accurate and hasn't been for some time. Microsoft's engineers are lower-quality than their peers, because Microsoft has been offering lower compensation than their peers -- by a substantial amount -- for over a decade now.
Maybe lower-level engineers don't really matter. I don't know. But unless you're at the partner level, you're getting paid a lot less at Microsoft than you would be elsewhere, and in light in recent events, you're not even benefiting from the stability you'd get elsewhere. I suspect this will have long-term impacts on Microsoft as they continue to lose talented engineers at the lower levels, but no longer have talented old-timers around at the higher levels. Once people at the 67+ level start retiring en masse, I'm not sure Microsoft actually has the talent to replace them.
The one year (2016) I worked at Microsoft after an acquisition was more than any startup has paid me, even if you factor in "(stock options exit / years worked at start) + startup salary"
I was blown away and felt stupid for all the years I've been chasing startup lottery tickets.
Any of the big tech companies, including Microsoft, pay WAY more than your average programming gig. OH and they don't have career ceilings for individual contributors.
I'd happily work there again someday, and really wish someone would have told me how high the pay is at these big tech companies 20 years ago. Would have skipped the startup route.
Most of them have houses with payments that are next to nothing and can do their jobs in their sleep.
They're not going anywhere.
They know what they are doing (TM).
Yea, things aren't perfect and risk free so you might as well not even look at your options for change. /s
Big companies suck. Take your brains to a smaller outfit and disrupt.
Where to, pray tell?
Even in a good economy inflation and cost of living increases are a thing.
I get where you're coming from, but the headline is clear in my opinion.
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.
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.
Relative worth is constantly changing.
There are professions that are paid more than ever
If I earned $5/hour last year and a gallon of milk was $5, then milk going to $6 means that my milk/hour rate has gone down unless I now earn $6/hour. That is a pay cut.
Inflation is basically a correction for a previous period where money was too cheap. It hurts everyone (at least everyone who didn't prepare for it).
There's no non-greed-related reason they can't share that profit with their employees, rather than stiffing them just when they need help.
An inflation measure is defined by a particular basket of goods, and sometimes their prices move for good reasons. We shouldn’t expect it to always cancel out in such a way that our salaries end up with exactly the same buying power for those particular goods.
But my cost of living is factored into whether or not I’m making enough money to, uh, live. My code output is not very good while I am dead.
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.
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.
Your point is 100% accurate though. We all deserve no bullshit. Just be honest with what we owe and will give each other. I know there’s been a couple of former SV darlings that have fallen out of favour because of leadership mandates about what is or isn’t appropriate at work, what they value, what your expectations should be to work there. I might not agree with them but that’s not the point. I love the blunt honesty. Huge signal on whether I want to spend 40hrs a week with these people or not. And so much more valuable than empty and aspirational values statements (or worse, recruitment marketing masquerading as values).
In some EU countries, companies are mandated to provide CPI increases. This has the effect of a natural greed-flation brake.
IMHO, should be the norm worldwide.
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.
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.
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.
And it's also a fact BOTH options and grants are given to employees, depending.
I didn't use one instead of the other, and frankly the existence of this entire thread is a bizarre amusement to me at this point.
>And stock does go up. It's Microsoft. Otherwise you can... just not use the option.
And lose the equity portion of your compensation, unlike stock grants. You don’t seem to get the nuance but you are so desperately trying to dismiss my point.
What is it you think I'm missing here at all? You're pissed employees get nothing if stock doesn't go up? You think I'm missing that? No, THAT'S THE WHOLE POINT OF OPTIONS.
Like you can only earn from the company's future growth.
It's generally not interesting for an employee to receive options because if the company doesn't perform well by the time your exercise date comes around or you leave the company then you get little or nothing. You would rather get stock grants which are shares that have value. If you get some shares when Apple is $200 and it goes to $100, you still have half the value of your shares.
Generally, in public companies (with extreme exceptions), options are issued to executives whose compensation is dependent on how much they can increase the company's share price. If they fail, they get little to nothing. If they succeed, they make a lot.
Thanks for asking. Let me know if you have any questions, I'd be happy to explain more.
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.
If their goal is indirectly lay people off, I really think that they have not thought this through.
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/4274288...
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.
Yes, exactly. Other companies like Jane Street definitely exist in the finance space and pay really well but collectively hire far fewer engineers than FAANG + FAANG-like companies do. The thing I like about them though is that most of the time their comp is all cash (salary + bonus) so you don't have to wait around for anything to vest before you can move on, if you so desire.
In one I remember one problem asked me to implement a hashmap, which wasn’t too hard, and then the second one had to do with some sort of latency prediction thing, where cleanups had to be done after certain numbers of milliseconds. I am afraid I cannot remember the details, but I remember that the second problem was quite difficult.
I suspect I could do much better now (or at least I hope I would), but I have not interviewed for them in like five years.
You would have to be quant analysts themselves to beat that number.
For example, Citadel has around 600-700 engineers globally and Jane Street only has around 400-500 globally. Both of these firms are actual behemoths headcount wise, and most other trading firms tend to be way smaller (total headcount in the high double digits or low 100s if lucky).
Meanwhile, Microsoft alone has around 70-75,000 engineers. PropTrading gets a lot of mindshare among TC chasers but is a very small industry.
Also, salaries are definetly comparable when factoring in hours worked, exit opportunities (PM/SE/EM/Entrepreneurship while working in Trading you deal with forced garden leave/potential litigation when job switching within Trading), and even the base salary itself. I remember IMC was offering around 100k base in Chicago in the early/mid-2010s when you could earn 90k-110k base at Groupon or JPMC as a SWE while working 30-40 hour weeks.
That said, mid-career (5-7 YoE) tech in the Bay Area at least reaches around $170-250k base with an additional $100-400k in stock+bonus over the 4 year vest.
Factoring in hours worked it seemed more competitive than around $200-300k TC for SWEs at the larger PropTrading firms in Chicago at least.
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).
Probably companies are banking on that.
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.
I'm being facetious but I honestly don't know. I've become a softy in my old age. I can imagine how deeply awful it would be for a breadwinner with a home and kids. Even for people I work with that I don't particularly like, I wouldn't want to put them in that situation.
Like a lot of Americans I've been experiencing a lot of envy for the more socialist European companies where maybe people have less to gain, but they also have less to lose. All I really want is a comfortable life for me and my family. I'd like the same for everyone else.
I remember working in Europe, and going to the park during a week day and seeing all these parents, both Mum and Dad playing with their children in the sun with this kind of carelessness about them. I vividly remember being shocked at that scene. I’d never seen it before.
People would just go home from work and not “grind” away at their jobs.
I think given a few more years of “automation” and most Americans might think differently about free market capitalism. Maybe at that stage it’ll be too late to change to something better?
Europe is a kind or project too, it’s a work in progress. I think their systems will just improve over time.
However, would I give someone a $1? sure and probably a lot more - but that is different than accepting a pay-cut for any reason from my employer who is booking billions of dollars a year in profits while letting people go.
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.
Bonuses are what are usually tied to company performance.
I'm simplifying, of course, but trying to understand the issue.
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.
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.
It doesn’t seem that controversial to me and certainly isn’t literal.
The issue is that media, just like you and me and MSFT, need to make money. Therefore the framing here.
As an employee you're still taking a risk at the company. It falls over you are out 100% of your pay + your health benefits. As an employee I absolutely take this risk into account when evaluating an employer.
Shareholders sometimes take a similar risk, but are often reasonably insulated from major downside via financial mechanisms of varying complexity, from index funds to complex options contracts.
Employment conversely, is almost always placing all your eggs in your employer's basket. If the basket tumbles many employees will lose their shirt in a big way.
And I feel like the recent bull run has made people forget that stock as a class can be extremely risky. Like the entire market going to 1/10 its former value risky (peak to trough in the Great Depression, the indices lost 90% of their value).
Salary is dependent on the contents of the employment contract.
Wiser outfits stay above that fray and compensate commensurate with employee expectations too. If you’re not getting a CoL or inflationary increase, you’re getting a pay cut. Plain and simple.
AI writing all the code for companies isn’t here yet, so I think for now they’d be wiser to keep devs happy. Especially if they’re flush with cash.
Expectations are surely based on what the market will bear. So if tech companies are all trying to cut costs and hence limit pay rises, it would be irrational for an employee to expect more.
Profiters of stocks are evil, and take advantage of the poor developers!!
Why don't you own stock then, it's public?
ANGER
Dividends could be paid out indefinitely as long as the company is profitable.
Squeezing people doesn't make them like you. Who knew.
I mean of course we are providing labor for money, but this is very different than a blue-collar worker living paycheck to paycheck doing hard manual work.
Fundamentally, almost all of us are N missed paychecks away from bankruptcy. For a lot of people, that N is 1, for some, it's 2 or 3, or even higher if you managed to save wisely. But we all have some number N. And the fact that we have that number should unite us against the few people on the far side of the derivative curve whose N is infinite. Tech workers had their relatively brief moment in the sun where their N was maybe 10-20, it got to our heads a little, and we started thinking we were "very different than a blue-collar worker".
On the other hand, as long as you manage your finances sanely, even in Europe you can reach a FIRE state (maybe not 100% retirement, but very close to it) in your 40s without too many issues.
If someone in tech is close to bankruptcy, due to missing a couple of paychecks, I really have a hard time to understand how they accomplished that. Of course, that may be different, if you just started your career.
Nevertheless, I know exactly 0 blue-collar workers (and I know quite a few) that could do FIRE in their 40s, and with sane financial management decouple themselves from the whole runmill in like 2-3 decades.
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.
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.
Share your salaries, train each other, give each other confidence, and get your worth!
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/microso...
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.
In the long run sure. But in the short run, employment is sticky. Especially in the professional world.
In this market? I'm skeptical. I'm sure some fraction of them can do so at equivalent or higher pay, but the tech market at the moment is quite soft and I wouldn't be surprised this was taken into account and served as another motivation for this move from MS.
Why are buybacks more employee hostile than dividends?
For the whales, sure, they're great, since they do the whole "borrow against the share price and extend forever".
oh Zebra.. never change.
https://chainstoreage.com/zebra-acquires-reflexis-575-millio...
I have been hearing this for awhile now. When I compare MS pay and benefits to what is on offer at other companies, almost the only jobs I see with better TC are at Meta and Google. And that will likely not be a thing of Meta's future.
The only company paying worst than MSFT were the hardware company such as AMD,Qualcomm and intel. But hardware companies are known for low wages
Keep doing it. What goes down, goes up. And we won't forget.
You need us more than we need you.
https://www.theguardian.com/business/2023/may/07/employees-e...
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.
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?
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?
Making up numbers: If I only spend 50% of my take home and part of that 50% is going toward my fixed rate mortgage, is my spending power down by 5%?
The price for eating out has increased 15% in a single year. Its not hyperbole. Also this assumes someone who's able to afford a mortgage
87% of taxpayers take the standard deduction. That means at most 13% of taxpayers take advantage of the homeowner’s tax deduction on interest.
The only correcting force in my opinion would be a strong union. But unionizing is quite risky and legitimately scary for highly paid employees.
Thus, divided we fall.
People clearly play the Iterated Prisoners Dilemma even in contexts where they’ve been intentionally isolated and freed from context (eg, psychology experiments) because we’ve evolved a group mentality — one that encodes game theory optima as a primal impulse.
Corporate leaders who forget that tend to blow their own company up, when humans instinctually repay defection with defection — as cold, hard math dictates they should.
We’ve seen many examples, in different context - from pay withholding to marketing campaigns that denigrate customers.
Fighting human nature is stupidity.
That's precisely what they want you to keep believing.
The truth is every single aspect of every employee/employer relationship is political, and always has been. If you don't accept it, your children won't have a choice to.
Employees are hired in order to create value for the company. Employees get jobs in order to get paid in exchange for that contributed value.
It's not political. It's the Law of Supply & Demand. Employer and employee cooperate for mutual benefit.
Lots of tech employees get hired to grow their director's/VP's little fiefdom within a company. Higher interest rates hopefully will reduce this, but it's still prevalent at large tech companies.
> It's not political. It's the Law of Supply & Demand.
I wonder what Adam Smith had to say about market inefficiencies caused by regulatory capture, rent-seeking, and collusion. I'm sure the market will magically fix these inefficiencies without outside regulation.
> Employer and employee cooperate for mutual benefit.
Really? Employers sure do cooperate with each other against employees [1]. I don't want to cooperate with an entity that views me as an adversary.
[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
As with all cartels, the employers above the table were cooperating with the cartel, and under the table were poaching.
> I don't want to cooperate with an entity that views me as an adversary.
I wouldn't, either. Nobody is making you or I.
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.
Makes it hard to converse because _nobody_ is wrong here: i half-assed my way through an economics degree and know just enough to know OP is making a relevant comment, then confirm their comment: M2 money supply, is in fact, decreasing.
In absolute terms, groceries, airline fares, new cars, hotels and household energy (such as electricity, fuel oil and utility gas service) are actually cheaper than they were a month ago[1].
[1] https://www.cnbc.com/2023/05/10/april-2023-cpi-inflation-rep...
(2) If/when deflation does occur, we know from prior instances the reduction in worker compensation is much higher than the rate of deflation.
I don't get this attempt to represent below inflation compensation changes as ok because one day in future some economic change will make this years actions "reasonable", because that is assuming that this year is a one off, rather than recurring. It also presumes that wages won't be cut even more when deflation occurs (generally by mass layoffs and then rehiring the now unemployed when their choices have been reduced to "homeless vs lowered pay").
We also know that businesses don't actually foresee a problem with deflation as they're still happily giving mass payouts and wage increases to their executive management, performing stock buy backs, and issuing large dividends. If companies were actually legitimately concerned about the potential for a deflationary event they would be hoarding cash.
Or freezing salaries. Just like in the article. I don't really have an answer for you with regards to any stock buybacks or large dividends.
I'm not talking about anything as reasonable or mentioning the 2nd derivative myself. M2 money supply is a specific thing that is responsible for money creation, it's going down now for the first time ever. We are in uncharted territory.
Honestly, just disgusting.
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.
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.
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.
Satya Nadella has made it abundantly clear that he's a moron, or at the very least a gambling addict. Does it really make sense for him to be in charge of a company that is worth almost as much as the nominal GDP of Africa [1] [2]?
[1] https://companiesmarketcap.com/microsoft/marketcap/ [2] https://en.wikipedia.org/wiki/Economy_of_Africa
This is a bad allocation of funds, but presumably this was done because of the off chance that the market would keep growing and the work for these people would follow.
When you do high-risk things with the express purpose of short-term gains, that's basically just gambling.
Now, it's possible they hired all these people in anticipation of future needs, which is fair, but it doesn't take a hyper-genius to know that markets fluctuate, particularly after a global pandemic.
So at this point, either Satya Nadella is so stupid that he didn't know that markets tend to fluctuate, or he's gambling with human lives.
The entire point of a low interest rate economy is that, if you have a bunch of cash, you need to put it into something other than a savings account in order to make anything of it. From that perspective, simply paying engineers to sit and twiddle their thumbs all day has the business advantage of preventing your competitors from moving any faster or to prevent your employees from forming future competitors. It's a complete win win for the companies.
In fact they remind me of financial advisors who charge you regardless of whether they make you or lose you money and are all consistently worse than passive investment in the long run.
That's how I feel about these overpaid CEOs. They are worth orders of magnitude less than they are paid
In what world was it a bad idea for them to hire thousands of people and then fire them? Laying someone off saves tons of costs, and in the meantime, you prevent your competition from utilising those resources. Literally a win-win for them. I say this as someone laid off. I don't understand how this whole trope of 'lay offs are bad for the company that did the laying off' has taken over.
It makes 100% of sense to hire and fire if your competitors are doing it, and you have the money. Microsoft is not suddenly going out of business here.
That's why, as an employee, it's smart to work towards financial independence and just not quite give a whole lot of you know whats. Like when my former boss told me layoffs were expected, that was just a signal that I was going to have way more time to go skiing, which we did.
The main reason so many employees feel like suckers is because they are not as ruthless as their ceos. I changed jobs during the pandemic with the express purpose of maximizing compensation. I made way too much for those years, and when I got laid off, I got free unemployment, free medical, and a free sabbatical. The only ones who were suckers were those who gave their companies loyalty and got laid off anyway. Stop doing that.
I guess I made the mistake of believing them when they said that they “regret this decision”, and assuming a human level of empathy.
Put this next to the fact that high level executives are paid upwards of 100X the average employee.
220,000 microsoft employees
Assuming each was in line to get more than a 5$ raise (obviously), the bonus to the CEO MORE than offsets the cost saved to the employees.
From a financial perspective, a bonus to the CEO makes perfect sense. Welcome to capitalism.
This isn't a fucking game. These are human lives. Microsoft laid off 10,000 humans [1] because their idiotic CEO decided it would be a really good idea to overhire like crazy in 2021 and 2022. This was the wrong decision and now they have to do massive layoffs and paycuts.
Compulsively making high-risk decisions in the hope of short term rewards is such a common thing that we actually have a word for it: gambling. This gambling addict has uprooted 10,000 human beings' lives, and yet he still gets a $10,000,000 bonus. Get off your high horse.
[1] https://techcrunch.com/2023/05/09/tech-industry-layoffs/
> This isn't a fucking game
That is *exactly* what it is to these people, and I don't doubt that they make use of game theory to make some of these decisions.
Until the rules of the game change, nothing will.
I'm sure a good percentage of these people quit jobs specifically to work at Microsoft. When they quit those jobs, their employer probably filled that position. Then Microsoft fired those people, and it's likely that a lot of people were unable to go back to their previous positions.
This isn't even taking to account people who moved to Washington or California to work at Microsoft, who sold their homes to move to a place with a substantially higher cost of living.
Selling your house and moving for a job in a clearly ridiculous job market is going all in on a gamble. Much moreso than nadella did
ETA:
I would like to point out that I feel like your point would be more valid if Microsoft were a startup or something. However, I think a lot of people joining assumed that it was a stable company and as such their job would likely be more stable than where they were coming from.
Of course Microsoft also historically benefitted from housing in the surrounding area being 1/2 to 1/3rd what it was in the bay area, so they could pay a lot less. Now that good family housing around MS campus starts at 1.5m, MS has been forced to increase salaries dramatically.
> Selling your house and moving for a job in a clearly ridiculous job market is going all in on a gamble.
Tech hiring had been crazy for years before the pandemic, IMHO pandemic hiring in tech didn't stand out as being particularly odd. Of course looking at the numbers afterwards, we can see how much companies grew, but no one applying for a job in Jan 2021 knew that Microsoft intended to hire 40K people that year.
Getting and extra 100k is real beneficial for each of those 10k people.
If those 10k people took big risks, that's a problem with their own risk management, rather than microsoft's
I just don’t think they should be gambling with human lives.
If a large corporation that has the power to do damn nearly anything can't figure out what to do with ten thousand highly talented software engineers, then some people in leadership need to discover some new sources of bright ideas.
[1] There are things MS is really good at operationally, getting contracts signed, getting marketing efforts in place, localizing software for true world wide releases, security reviews, etc. Sadly they got rid of their engineering excellence org years ago. I once spent over a year looking around for someone who knew SQL who was available to spend half a day helping me optimize a database. Then there is the time my group couldn't find anyone who knew how to write software for Windows...
Welcome to Capitalism...
Presumably then he won't get a raise this year along with the other employees as well.
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...
* https://www.statista.com/statistics/267808/net-income-of-mic...
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.
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.
Where are we heading?
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'.
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.
Lots of people are leaving as a result..jobs are still easy ish to come by and those jumping ship are still seeing gains.
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.
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.
Time for some chemo/radio therapy. :-D
Or maybe I am mistaken and someone else is more capable of making the top product, in which case I might still get my own team out of growth. Let there be some meritocratic process and ability to assume responsibility for risks and reap the rewards. But if there is no potential reward, why should I suffer from overwork and inevitable interpersonal conflict when stuff needs to get done? Why should anyone? Eventually the whole product will be cancelled since it's not making headway and all of us will move to new gigs.
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?
Wealth inequality has been getting steadily worse in the US for decades, and moves like what Microsoft is doing only make that worse.
Capital is distributed to shareholders when the company has few good options to deploy it internally.
These distributions are then reinvested by shareholders to more efficient purposes.
If a company can’t efficiently deploy its capital and can’t distribute it… it just buys other companies and becomes a conglomerate with ever increasing market power.
Why do you think this is true (specifically the "more efficient purposes" part)?
Why would anyone try to make less money as taxes on them increase? Makes no sense.
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.
Buying stock does not magically eliminate the need for a raise.
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.
Without a raise, you're worse off whatever you do.
Because if the company goes under you lose your job, and your savings at the same time. In other words it consolidates risk rather than diversifies it.
But honestly the idea that you don't need a raise but rather invest and wait for a dividend return is bonkers. Those are to completely unrelated things.
By all means invest. There are lots of stocks to choose from. But that's completely orthogonal to your salary package.
You know, I never even considered that maybe I should have disclosed that to employers until right now...
Microsoft is not going under
The chance of you being laid off after a stock price fall is most likely correlated.
There are some companies that are "unlikely to fail" in the sense that their stock price falls to zero. I would agree that Microsoft likely falls into that category.
But really large companies have "failed" in very short time. Usually as the result of some sort of illegal activity. WorldCom being the obvious example here. (A place where employees were "strongly encouraged" to buy their own stock.)
Bear Stearns, Lehman Brothers and others have also been "too big to fail" - yet failed.
The fact that these events are relatively uncommon (for the very large) doesn't negate their impact. Equally less-large companies fail all the time, and so if you work for something a bit smaller it's a prudent strategy to invest you time in one place, and your assets elsewhere.
No, its not. Its “effectively the same as” using some of your shrinking-in-real-terms salary to buy stock; if you can afford to do it at all, you could afford to do it more if you had a raise, so clearly the two are not equivalent.
(OTOH, if Microsoft undershoots the market on salary and has stock worth buying, if you are good at your job you can get a job someplace that isn’t undershooting and use your additional salary to buy Microsoft stock — which is equivalent to both getting a raise and using some of your salary to buy stock.)
EDIT: Of course, if leaving for places not undershooting on salary becomes popular with the competent, buying Microsoft stock based on past performance may turn out to be a suboptimal idea.
(Individual stocks have more returns because they're riskier, not because they have more alpha. And you're accepting however much risk you get instead of planning for it - just borrow someone else's money if you like it so much.)