Microsoft’s CEO Satya Nadella just got a huge pay raise despite a rocky year for the company’s workforce. Nadella’s earnings for this financial year have jumped a whopping 63%, totaling around $79.1 million (or £60.9 million). Even though the company has had major financial gains, 2024 has been a rough year for many of its employees, with significant layoffs.

Nadella’s Big Pay Boost

This substantial raise in Nadella’s income comes from a mix of cash and stock, as announced in Microsoft’s latest annual report. Microsoft has had an impressive year financially, with strong stock performance that’s kept investors happy. The company’s market value now stands at over $3 trillion, driven largely by a growing focus on artificial intelligence (AI).

While it’s a profitable time for the company, the same can’t be said for many employees. Microsoft had two big rounds of layoffs this year, starting with 1,900 job cuts in January. Later, in September, an additional 650 workers in the Xbox division were let go. This year alone, over 2,500 employees lost their jobs.

A Year of Transformation for Xbox and Gaming Studios

2024 also saw Microsoft making some major moves in its gaming sector. As part of a restructuring effort, the company shut down three gaming studios under its Bethesda branch. These included Arkane Austin, Tango Gameworks (now run independently), and Alpha Dog Games. These closures came amid Xbox head Phil Spencer’s remarks on the sluggish growth in the console gaming industry. Microsoft has been trying to adapt to these changes by looking toward new opportunities, including cloud gaming and platform expansions.

Despite these closures and layoffs, Microsoft’s gaming ambitions remain high. Nadella, in the annual report, shared a hopeful outlook. He highlighted how Microsoft has made huge strides in the gaming market, especially after its acquisition of Activision Blizzard King in October 2023. This acquisition brought popular game franchises like Candy Crush, Diablo, Halo, Warcraft, Elder Scrolls, and Gears of War under Microsoft’s wing, adding hundreds of millions of players to its ecosystem.

Expanding Access to Games

Nadella also discussed how Microsoft is working hard to make gaming more accessible. With advancements in Xbox cloud gaming, the company aims to allow gamers to enjoy their favorite games across more devices, whenever and wherever they like. Microsoft has even extended its popular gaming titles to new platforms, including Nintendo Switch and Sony PlayStation. This move marks a big shift from the traditional exclusivity approach, as Microsoft seeks to broaden its audience and give players more choices.

Why AI is Key to Microsoft’s Future

Microsoft has made clear that AI is at the heart of its future strategy. The company has been pouring resources into AI development, viewing it as a transformative tool across its range of products. This includes everything from enhancing productivity tools like Microsoft Office with AI features to introducing new ways to assist users through Azure’s cloud services.

This push towards AI has helped Microsoft’s stock rise and kept its value solid, despite the layoffs and the shifts in its gaming division. AI is quickly becoming a critical part of Microsoft’s business, and the company’s recent earnings reports indicate that its AI ventures have contributed to its financial success. This success in AI is one reason why Nadella’s earnings shot up.

Reactions from the Public

The news of Nadella’s large pay increase alongside layoffs has stirred mixed reactions. Some people argue that his raise reflects Microsoft’s strong financial performance and effective leadership, while others are questioning how fair it is to reward top executives so handsomely while thousands of employees lose their jobs. With layoffs happening at a time of financial growth, the contrast has sparked conversations about corporate practices and the balance between executive rewards and employee welfare.

What Lies Ahead for Microsoft and Its Employees?

As Microsoft moves forward with its AI projects and gaming expansion, the future is likely to bring more changes. The tech giant is focused on maintaining its place at the forefront of technology, but it remains to be seen how this will impact its employees and the structure of the company. Many are hopeful that these advancements will eventually lead to new opportunities, but others are cautiously watching how Microsoft manages its workforce and corporate strategies.

Summing It Up

In 2024, Microsoft has seen some big wins and big losses. While the company has reached new heights in terms of market value and AI growth, its workforce has taken a hit with over 2,500 layoffs. Nadella’s significant pay increase serves as a reminder of the company’s financial achievements, but it also brings attention to the struggles faced by many of Microsoft’s workers this year. As Microsoft continues to innovate and adapt to a fast-changing tech world, it will have to navigate the challenges of balancing profitability with employee well-being.