Microsoft CEO Satya Nadella said in an email to staff Wednesday that full-time salaried employees won't be getting raises this year as the company aggressively invests in artifical intelligence amid the uncertain economy, according to a report.
While there will be "salary increases for certain hourly or equivalent roles, we will not have salary increases for full-time salaried employees this year," Nadella said in a leaked email seen by Fortune.
"We are clear that we are helping drive a major platform shift in this new era of Al, and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties," Nadella said.
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Microsoft is pouring billions of dollars into OpenAI, which developed ChatGPT, and fusing its technology into its products as the company races against Google to dominate the space.
Earlier this year, Microsoft extended its partnership with OpenAI and fused a new AI chatbot feature on its search engine Bing. It is also integrating similar chatbot technology into the cloud computing and software products it sells to big businesses and organizations.
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A Microsoft spokesperson told FOX Business that "navigating both a dynamic economic environment and a major platform shift requires us to make critical decisions in how we invest in our people, our business and our future."
As part of this effort, the company is "funding our compensation to align with the overall market," the spokesperson added.
Although the company won't be providing salary increases for full-time salaried employees this year, it plans to continue investing in its employees through promotions, bonuses and stock, the spokesperson said.
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In the email, Nadella explained that its promotion budget won't change and employees will still get high rewards for exceptional performance.
Meanwhile, Microsoft's bonus and stock award budget will be closer to historical averages and the company's senior leadership, including Nadella, will get lower performance-based bonuses compared with last year.
The Associated Press contributed to this report.
