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Employees at Microsoft will receive an additional cash award as a thank-you for a year of hard work, the software giant announced Tuesday.
The one-off payment is supplementary to the employee’s annual bonuses and will be worth 10% to 25% of their annual bonus payment for the company’s fiscal year 2024.
Kathleen Hogan, Microsoft’s Chief People Officer, informed staff in a memo earlier this week, emphasizing the reward is a thank-you for the outstanding output of the workforce in the recent fiscal year.
“The senior leadership team and I want to recognize the tremendous work and impact of our people who delivered a terrific year of solid execution and world-class innovation,” she wrote.
Hogan directly attributed the company’s strong financial performance over the fiscal year 2024 to “the incredible focus, creativity, and collaboration of our people and our collective efforts as One Microsoft.”
In the past year, Microsoft has seen its share price rocket by 25%, putting its market value at over $3 trillion, thanks in part to a calculated shift toward investment in AI products.
How is Microsoft allocating the bonus payment?
The reward will only be given to employees below the executive level, with more junior staff given a higher percentage of their annual bonus to ensure a more even weighting across the workforce.
“All Microsoft employees in levels 67 and below, including hourly and equivalents, who receive FY24 rewards will be eligible to receive a special one-time only cash award in addition to their annual rewards,” the memo stated. “This special one-time cash award will scale based on the employee’s FY24 impact.”
Those at higher levels, such as 67, will receive a payment roughly equal to 10% of their annual bonus, while those at lower levels such as 61 and below will receive a payment roughly equal to 25% of their annual bonus.
“As the SLT considered this award, our goal was to ensure that everyone eligible receives a meaningful amount at all levels, and thus the differences in percentage of bonus based on level,” Hogan explained.
Most employees stand to earn up to thousands of dollars from the one-off bonus, though Microsoft has not specified how much it plans to spend in total.
Bonus comes amid HR turbulence at Microsoft
Microsoft and Hogan hope the award, which will be distributed in September 2024, is enough to keep staff motivated and committed to their work.
“We are grateful for your dedication to our mission so that together we can continue to empower everyone around the world,” she wrote.
But widespread layoffs across teams since late 2022, including to DEI units, have left many employees unsettled.
Multiple rounds of job cuts have included downsizing its Azure Cloud and Mission Engineering departments in June 2024, with a leaked memo attributing the layoffs to greater AI investment.
Microsoft has repeatedly stated that “Organizational and workforce adjustments are a necessary and regular part of managing our business.”
After the initial round of cuts in late 2022, pay increases were frozen for some full-time staff, despite promises in early 2022 that it would double its budget for merit-based pay rises across the globe.
Hogan did confirm, however, that Microsoft would be offering merit-based pay increases, bonuses, and stock awards for the most recent financial year.
The company was also impacted by the recent global IT outage, in which a glitched Crowdstrike software update was sent out to more than eight million Microsoft devices across the globe, and recently agreed to pay $14.4million to settle claims from the California Civil Rights Department (CRD) that it penalized workers for taking protected forms of leave.
