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Comment by diversionfactor | Hacker News Reader

And yet, at exactly this time last year:

"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."

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They didn't double the salary budget, that was such a well played PR bs by MS. They doubled the "salary increase" budget for lower levels (so instead of getting a 1% increase per year, they'd give out 2% - to the lower levels).

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...

Even so, getting double the salary increase last year and zero salary increase this year instead of a layoff isn't a bad deal.

It's a shit deal. Microsoft's compensation is already well below competitors unless you're at the partner level or higher. They absolutely haemorrhage talent at lower levels, but hang on to low performances who just can't get a job elsewhere.

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.)

I'm talking about the basic math, absent all other factors. Given a choice between an N% raise two years in a row or a 2N% raise on the first year, the latter is more money.

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.

> N% raise two years in a row or a 2N% raise

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

It's about leverage, with all the faang layoffs, they now don't have to pay as much for employees.

More than that there's a whole strain of performative cost cutting due to the recession that's always seemed just over the horizon for the last year. Part of the goal is just to signal to investors you're ready for this continuously hypothetical event by pre tightening your belt as a company so they don't "price in" the recession into your stock. It's another negative outcome of basing so much of our evaluation of companies off of stock price which is partially to completely decoupled from the actual performance of companies.

> More than that there's a whole strain of performative cost cutting due to the recession that's always seemed just over the horizon for the last year.

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.

The juxtaposition of record profits, stock buybacks, and "we're not just raising prices because we can it's inflation for us too" is pretty telling. I often find myself wishing courts/government could just cut through the posturing on stuff like this and call bullshit, like the ever present promises of lower consumer prices during mergers because that's the magic test and courts are seemingly required to swallow whatever thin veneer companies promise. You don't need tax breaks you spent the last 3 on stock buybacks!

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.

Cutting back on wages to increase leverage has been the point the entire time too, not because companies needed the cash

The situation is completely unhinged as more than 50 percent of inflation has been found to be driven by corporate profits.

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

Large corporations are arguably a form of "AI," so that's not too surprising.

Artificial at least. :-)

Artificial Institutions

I think they prefer the term Synthetic Persons.

Microsoft

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.

If you're actually curious... https://i.imgur.com/uoGaVAa.png tl;dr it says be cautious about cutting compensation.

Not skittish or reactive. They simply don’t need to give raises, so they won’t. What are their devs gonna do? Go somewhere else?

Unionize.

hard to make that call to strike when there are many recently unemployed tech workers looking for work. sure you might get what you want or you might get fired and replaced by someone willing to work for lower compensation

for anyone reading: its VERY illegal in the US for a company to retaliate for your interest in unionizing. You will probably win a large lawsuit if this happens.

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).

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