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Severance Gaffe Sends Microsoft Begging

By JESSICA MINTZ
,
AP
posted: 275 DAYS 11 HOURS AGO
comments: 71
filed under:
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SEATTLE (Feb. 23) - A few weeks after launching the first wide-scale layoffs in its history, Microsoft Corp. admits it screwed up a key part of the plan.
First Microsoft realized that an administrative glitch caused it to pay more severance than intended to some laid-off employees. The company's response: It asked the ex-workers for the money back.
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But when one of Microsoft's letters seeking repayment surfaced on the Web on Saturday, the situation turned embarrassing. On Monday, the company reversed course and said the laid-off workers could keep the extra payouts.
Lisa Brummel, Microsoft's senior vice president for human resources, said the letters were mailed to 25 of the 1,400 people let go in January. Most of the checks were off by about $4,000 to $5,000, she said.
Brummel said she learned of the letters over the weekend after one appeared on the technology blog TechCrunch.
"I decided it didn't quite feel right," she said in an interview.
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The executive called most of the 25 laid-off employees Monday to personally tell them Microsoft would not seek repayment after all.
Redmond, Wash.-based Microsoft also gave about 20 employees too little severance. When the company noticed its mistake, it sent checks and explanations to those people, she said.
Brummel called the glitch a clerical error, and said that at some point in the process of calculating severance packages, communicating with employees and cutting checks, "we had payments misaligned with people's names." (Brummel said she didn't know whether a Microsoft Excel spreadsheet was at the root of the problem.)
With the recession biting into sales of Microsoft's core Office and Windows software, the company said in January it would let up to 5,000 of its 94,000 employees go, the only mass layoff in its 34-year history. Microsoft remains profitable, however, and has a cash hoard of nearly $21 billion.
Shares of Microsoft sank 79 cents, or 4.4 percent, to close at $17.21.
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-02-23 14:48:19
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1 - 10 of 71
71 comments

SuzyQ807 08:13:31 PM Feb 24 2009

Something's very wrong there - bringing in workers on these H1-B visas whenAmerican workers are being laid off. Another thing is that dual-citizenship workerscan afford to work for less because they can return to their native land and use their national health care system. American workers don't have that kind of a safety net and need to save for their future health care. We need new solutions for American workers that give us a level playing field.

Jereo96 07:16:57 AM Feb 24 2009

amazing how many criticize microsoft for going out of the usa, yet you think nothing of BUYING A JAP CLOWN CAR, SHOPPING AT WALMART AND BUYING EVERY PRODUCT IN YOUR HOME THAT IS PRODUCED IN A FOREIGN COUNTRY. YOU ARE NO BETTER THAN MICROSOFT.

Tazgirltsc 07:13:16 AM Feb 24 2009

Any company that has laid off American workers due to outsourcing does not deserve any government help. If companies are not going to support the American people, the American Government should tell them to ask for help from the countries where they outsourced the jobs. See how quick they will come to your rescue.

RBurke3177 07:10:37 AM Feb 24 2009

Yes, its true we can not afford our government. Thats why the bail out money is going to the local governments. This way when we all go broke they can still function.

TTrk1 07:06:56 AM Feb 24 2009

i fell AMEX has alot of nerve asking and receiving 3.5 billion from the govt. They screw thrie customers left and right and outsource plenty of their work. It sjould rename itself Foreign Express!!!

TheOracle7 06:39:01 AM Feb 24 2009

If they are using Windows to do their math, what does it say about their product?If globalization was to bring others up, the logic would be that it would make others come down to equalize it - namely US. Thanks Mr. Clinton.If government and the law can't bring the corporate terorists to heel, then we should not buy from them - and then those who flip out and shoot the CEO's right down to the midl level managers should get a free defense fund. After all, were they not psychologically presured into doing more with less as we constantly read about? Doesn't that constitute an abuse form? We herald women who kill their abusers, what willhappen when one kills an abusive boss? It'll be interesting to see how that plays out.

RRobe71907 02:07:36 AM Feb 24 2009

Alexis77jM 10:49:14 PM Feb 23 2009 You can't buy American - Fakeconomics100 - unless Americans take less pay . . . . . . . . . . .And what, pray tell, O Wise Superior One, How much should American Labor be paid? $1.00/hour? Or $1.00/day? What do you know about payscales? What research have you done on income disparity? Please tell me, this should be VERY entertaining!

ERVINB616 11:40:09 PM Feb 23 2009

How about that? Just a few months ago Bill Gates was in DC crying to Congress about how the number of H1-B visas issued each year needs to be increased because he, and other American employers, couldn't find enough American workers to fill all the jobs they had to offer! Now he's laying off 1400 people? What's up with that, Bill? And just how many of those laid off workers are H1-B visa holders, huh? My guess is, not a one! I bet every single one of them is an American worker. Why do I think that? Because the American workers get paid more than the H1-B workers.

chippersql 11:22:56 PM Feb 23 2009

Lets see what Obama and the boys can do in Washington. So far i am not really impressed unless you like communist Russia and socialism. Don't blame Bush this time around. We need to get people jobs and the economy moving and the act does not really do much for creating jobs.

Ga7smi 11:06:10 PM Feb 23 2009

and you thought microsoft was a group of rocket scientists

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