Microsoft President Brad Smith announced that the Redmond-based software and cloud-computing giant would spend more than $110 million funding local nonprofits and covering the wages of hourly workers at its idled corporate campuses. Some of that money would also be used to help Washington state bring back students to classrooms, adding support to a state initiative announced on Wednesday.
Smith characterized the initiatives as a measure of the company’s commitment to its local community but also a recognition of just how fortunate the company and its tech peers have been during a pandemic that has devastated many industries and communities.
“The industry sector in the [state] economy that was doing the best before this began — namely tech — is also doing among the best in the pandemic itself,” said Smith during an interview with The Seattle Times. “So I do think it’s a time when those of us in the tech sector can and should ask whether we can do more.”
The company reported net income of $13.9 billion for the most recent quarter, a 30% increase over the same quarter in 2019.
Thursday’s announcement comes two years after Microsoft launched a $500 million initiative to help boost affordable housing in the Puget Sound area.
The latest initiative has three principal components.
First, Microsoft will continue to pay the wages of hourly workers employed by vendors that provided services on the company’s campuses before the pandemic but who have not been needed since Microsoft shifted to a work-from-home model. The company will “continue to pay their full wages until whatever day it is they come back — we assume that it’ll be in 2021,” Smith said Thursday.
Microsoft began that policy in March, two days after telling its own employees to work from home, and has since spent more than $110 million on those wages in Washington state. “We just thought it was important to publicly let all of them and their families know that we don’t want them to spend the holidays in December worrying about what’s going to happen to them in the new year,” Smith said.
Second, Microsoft will extend its support for nonprofits in the state. The company expects to give approximately $60 million to local nonprofits between Dec. 1, 2020, and July 15, 2021, Smith said.
That’s on top of the more than $98 million in assistance state nonprofits have received from Microsoft this year, in the form of around $67 million in cash and an additional $31 million in technology, in-kind support, product discounts and the company’s coronavirus response school lunch program, the company said.
A third initiative would help school districts reopen.
Smith said Microsoft would offer a free data-tracking application to allow school districts to track cases on their campuses, and was ready to donate personal protective equipment from its stockpile to schools that need it, complementing government efforts already underway. Smith is also advocating for Washington Gov. Jay Inslee to bump up teachers in the vaccine priority list.
“We want to build momentum for reopening schools,” Smith said. “Technology is not providing an adequate replacement for in-person interaction.”
The company is one of dozens of private-sector giants swooping in with reinforcements for school districts during the pandemic. Nationwide, Microsoft has spent around $200 million on remote learning technologies for students, Smith said. Locally, Amazon donated 9,000 laptops to Seattle Public Schools worth $2.2 million and has been helping the district with logistical tasks such as delivering meals to students’ homes. It has also donated millions more to COVID relief funds centered on schools.
Smith did not have concrete numbers on how much Microsoft’s app is worth, saying it was “millions of dollars” but not in the “tens of millions.” The application would allow the public and education officials to see the results of coronavirus tests in their schools and their wider communities, as well as health data pulled from county and state sources. About a dozen school districts in the state are offering tests to anyone experiencing symptoms, and more are expected to launch similar efforts in January, state officials said.
Microsoft has deployed the application in the Los Angeles Unified School District, where it is being used as part of a larger research effort on reopening. The district is currently operating remotely, but began gathering baseline testing data in August from a population of its employees reporting to work inside buildings and kids in child care facilities.
The company conferred with state Department of Health officials, superintendents of school districts and school board members to gather ideas for what to implement, Smith said.
The new initiatives, Smith said, were a continuation of Microsoft’s efforts to invest in the region and to help steer economic growth in a way that is more sustainable and more equitable. But he noted how that goal had been threatened by the pandemic, which has widened many socioeconomic inequalities: “The combination of events of 2020 have sort of knocked us off our horse, so to speak, and we need to find a way to rediscover our mojo as a region.”
Asked about the size of Microsoft’s latest investment in relation to the company’s overall wealth (it finished its last fiscal quarter with $137.9 billion in cash, equivalents and short-term investments), Smith tacitly acknowledged the company could do more — and left the door open for more investments in the future. “We didn’t need a spreadsheet to know that we could afford to do this,” he said.
But Smith also emphasized that in developing the new initiatives, Microsoft first had identified areas where it would have the greatest impact on regional recovery and then calculated how much to spend.
“One of the interesting things about money is you can always spend more until you run out of it,” Smith said. “The bigger question is, where do we make the most difference?”