Microsoft doubles salary budget to retain staff as cost of living rises

Microsoft plans to “nearly double” its budget for employee salaries and boost the range of stock compensation it gives some workers by at least 25%, in an effort to retain staff and help people cope with inflation.

The move will mainly affect “early to mid-career employees,” the software giant said in a statement Monday.

“As we approach our annual total rewards process, we are making a significant additional investment this year to compensate our employees globally,” the Redmond, Washington-based company said. “While we have factored in the impact of inflation and rising cost of living, these changes also recognize our appreciation to our world-class talent who support our mission, culture and customers, and partners.”

Read more: Inflation is soaring. What does that mean for salary and raise negotiations?

In addition to contending with cost-of-living increases and a tight Seattle housing market, Microsoft is locked in a fierce battle for talent with companies like Amazon, Google and Facebook owner Meta, as well as startups. Fields like cybersecurity, artificial intelligence, the metaverse and cloud computing have been especially competitive. Moreover, the pandemic has led many workers to relocate and reconsider employment options.

Microsoft’s salary package is composed of base salary, bonus and stock. The changes will apply to a substantial part of the company’s workforce, which stood at 181,000 as of June 30, 2021.

The company didn’t discuss pay figures, so it’s hard to tell what the new compensation levels will translate to in dollar figures. But the Glassdoor website estimates that a new graduate working as a software engineer at Microsoft makes about $163,000.