Microsoft Tells Contractors To Take 7 Days Off

Microsoft Corp. has told about 1,000 technology contract workers to take seven days off the job, without Microsoft pay, in a cost-saving move.

(Seattle) Microsoft Corp. has told about 1,000 technology contract workers to take seven days off the job, without Microsoft pay, in a cost-saving move that came as the company unveiled a series of new perks for its internal staff.

Microsoft spokesman Lou Gellos said Monday that Microsoft told vendors who supply the contractors that about 1,000 workers globally would not be needed this week. The vendors, whose workers do software development for Microsoft, also were told to schedule two other days off, Gellos said.

Gellos said this was one of the first times that Microsoft has scheduled a short period of time off for its contractors. He said the company made the decision because it was running over budget in some areas as it headed toward the end of its fiscal year on June 30.

He stressed that the contractors' work was being delayed, not canceled.

"We want to be fiscally responsible here," Gellos said.

The vendors were informed of the decision at the beginning of the month. It affects workers in Redmond, India and elsewhere, he said.

Gellos also said the decision was unrelated to a move, announced late last week, to offer new perks to its Redmond employees such as enhanced child-care benefits, access to dry cleaning and grocery delivery services, and better cafeteria food.

"I can understand why people might think that there is a connection, but there is not," Gellos said.

Along with the new perks, Microsoft said it was rejiggering its compensation and evaluation system. The moves were widely seen as efforts to improve morale and keep up with competitors such as Google Inc. who also offer enticing benefits. Microsoft executives have said that one key to battling companies such as Google effectively is being able to get -- and keep -- talented workers.

In a memo to employees, Lisa Brummel, senior vice president of human resources, called the plan "a broad set of investments we are making to ensure that Microsoft continues as one of the world's best places to work, with great opportunities, great leadership and a great working environment."

Marcus Courtney, president of the Washington Alliance of Technology Workers, a tech worker advocacy group, said he thinks the two moves illustrate there is an unequal system for those who work at -- but not for -- Microsoft.

"It shows the unfair relationship that they have between Microsoft and these contractors," he said.

In addition to its tens of thousands of internal employees, Microsoft relies heavily on contractors for all manner of tasks. The company was involved in a long-running legal battle, beginning in the early 1990s, over its use of temporary workers, but it has since changed its practices.

Bill Wilson, a software engineer who has worked as a contractor at Microsoft for about six months, said he was surprised when he found out last week that he wouldn't be working -- or getting paid -- for seven working days beginning Monday. Wilson, 57, said he might have made different financial plans if he'd known about the time off. But he was more concerned about some of his colleagues with younger kids and lower salaries.

"It's gotta be quite a shock," he said.

Although Microsoft said it would not pay the workers, Gellos said the companies that provide the workers were free to schedule them at other jobs during that time. But Courtney said it he thought it was unlikely that workers could line up something else so quickly.

Gellos would not name the companies providing the workers.

But Plano, Texas-based EDS Corp. confirmed that it contracted fewer than 25 of the workers. Companies often ask EDS to make changes like this and such flexibility is one reason they use contract workers, spokesman Travis Jacobson said.

"To us, this is just business as usual," he said.

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Reader Comments:

Fri, May 26, 2006 Anonymous Anonymous

Money problems, nah. Just juggling figures to meat certain commitments.. I definately agree with what RL says. Contractors are a different beast to employers. I would hope as part of the contractual agreement there are clauses that allow Microsoft to do this, otherwise its unlawful and the contractors could seek legal advise. Usually 4 weeks noticed is standard afair for most contracts I've seen. THe article says they were informed at beginning of month so 4 weeks is fine if the are to take time off next month.

Thu, May 25, 2006 bart Anonymous

has microsoft got money problems?

Thu, May 25, 2006 RL Anonymous

With all respects to Marcus, the system SHOULD be unequal. Employees should be treated differently than contractors. Treating everyone the same is how things got so messy in the mid-90s with the legal issues. Furthermore, I respectfully push back on Bill's concern for his younger colleagues. If you are a contractor and seven days of work (about 3%) affects your finances, you shouldn't be a contractor, where the possibility of MONTHS of "non billable" are a possibility. I've been a contractor for a long time, and I don't WANT equality and I plan for billable outages. I applaud the move as being "outside the box", with the least long-term impact on everyone involved. Better than letting 3 of every 100 contractor go.

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