Microsoft said it will offer its rank-and-file employees a one-time performance-based cash award of up to 25 percent of their annual bonus.
In a memo, Chief People Officer Kathleen Hogan said salaried and hourly workers at the senior director level and below are eligible.
Junior-level employees could receive up to 25 percent of their annual bonus, and senior directors could receive up to 10 percent.
The decision comes as a gesture of recognition following a fiscal year where Microsoft saw significant financial growth.
The company reported a 15 percent revenue increase in the fourth quarter compared to the previous year and an overall annual growth rate of 16 percent.
It is a notable acceleration from the seven percent growth in fiscal 2023.
Hogan noted the size of the awards varies to ensure meaningful recognition across different levels within the company.
This move is also part of Microsoft’s broader strategy to retain and attract talent in a competitive labor market, particularly for roles in high-demand areas like artificial intelligence.
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In recent months, Microsoft has faced challenges, including workforce reductions and organizational restructuring.
In early 2023, the company cut around 10,000 jobs, and in June, it reduced positions in its mixed reality division, which includes virtual and augmented reality projects.
The cash awards also follow significant changes in compensation practices at Microsoft.
In 2022, amid rising interest rates and efforts to curb inflation, the company increased stock allocations for employees.
It nearly doubled the budget for merit-based salary increases for those at the senior director level and below.
However, CEO Satya Nadella informed employees the following year that there would be no salary increases despite the company’s financial growth.
