Well, maybe not so great for ex-workers. Current employees still have RSUs and employee stock purchase plan, so those shares are making bank. OTOH, my Microsoft-employed spouse also says "no significant pay raises this review period", and I think that's the "not so great for workers" part that TFA missed. MSFT is going big guns, but doesn't have money for increased compensation.
Stock price doesn't have any effect on the value of ESPP at Microsoft, but you're right that it does on the RSUs. At least one company exec has directly proposed this as a counterbalance to "no pay raises" (From 2023: https://www.businessinsider.com/microsoft-exec-defends-compa...).
That said, anyone can own Microsoft stock. With respect to current employees - the common wisdom has always been not to own too much stock in your employer, with the rationale that if things aren't going well and the stock is tanking, you're likely to get laid off and then you're even worse off. But these days I'm thinking that the opposite is true, at least in bigtech: The more likely scenario is that you get laid off regardless and the stock goes up in response.
ESPP is discounted from quarter end price (I vaguely recall it being either last q or following q, whichever is lower but that seems like too good to be true). So constantly increasing share price does have an effect, both short term and long.
Well, not that great for current workers either. Microsoft RSUs are usually 20% (compared to 40-80% in other big tech) or less for most employees, and on average msft has 30-50% less total compensation than other big tech.
All this stock upside might put some people's compensation to their true market value, but even that is based on tenure and historical stock vests.
Would they be better off without the stock upside? I dont think so.
Remember, today we are talking about "stock price is up", but tomorrow the price may be down. What the parent said does not change regardless -- Microsoft employees are not as well compensated compared to other companies, plus the layoff is real.
Retention was never a priority at MS. Lower comp compared to G/Meta/Amazon, no refreshers, poor special stock awards, tenure-based promo queue, (...). If RTO becomes a reality I think the calculus of staying at MS will be tipped over for many.
Over 25 years ago MSFT was doing the same thing. Amazon, Google, and Facebook didn't yet exist, so we were losing candidates to Oracle because MSFT paid so little. When Microsoft finally wiped the sleep from their eyes, my next review period saw me getting a 23% raise at review time, some from performance and a lot from Microsoft finally catching up to the rest of the industry because they couldn't hire anyone (I'd say it was also a demonstration of how badly I was getting screwed, but MSFT options were hot back then).
Will it happen again a generation later? Depends on how many candidates go to Amazon instead, I guess.
Google did the same thing about 15 years ago. Universal 10% raises one year.
In this economy the calculus will be “hold on to your job at all costs and hope that next round of quarterly layoffs hiring doesn’t touch you”
Where would those employees go? Almost all rival big tech companies are implementing the same thing. They also have a nearly complete hiring freeze unless it's for a super critical role (very rare) or extremely high skilled AI work (few tech workers can do).
These employees are going to complain, but unless they have their FU money already, they are 100% going to RTO. What else can they do within reason?
The "deal" at Microsoft is that you get paid 30-50% less than other big tech employers but it's a lot chiller (imo this is true from my experience at both msft and faangs, I hear it's worse recently though). A LOT of people are there for the lower work pressure and no RTO. If they get rid of that, there's no reason not to jump to Google where you'll get paid substantially more except for needing to grind leetcode. Or even go to Meta/Amazon if you're willing to grind for even bigger bags of cash.
I understand that, my point is that Meta/Amazon/Google have massively pulled back on hiring as well. I personally went from being contacted several times per year by Meta to being 100% ghosted mid-conversation last time. They fired all the recruiters.
> tenure-based promo queue
i wouldn't mind this
The deal was that you could have a chill work environment without grind.
Not anymore.
I don't know what a tenure-based promo queue is, but from the name, wouldn't it in fact be extremely focused on retention?
And it doesn't seem to be a bad strategy for their market fit, at least not for the last 20 years.
"big guns" aka betting the future on something nebulous and the true price that is costs is still not being given to consumers of that service. Like Azure, they'll lock you in and raise rates. That's the business model
It's actually been great for ex-workers. Most of their RSUs are much more valuable because the company has pushed for efficiency which has attracted investors and significantly increased market value.
While there have been layoffs, companies are generally still hiring and often employees can overlap severance with a new role.
The problem is that these last few rounds of layoffs have clearly demonstrated that, no matter who you are and what you do at MS, you don't know if you're going to still have a job tomorrow. Much good that unvested stock will do then...
Until they get laid off next
Please.