Monday, February 23rd 2009
Microsoft Severance Pay Blunder Costs Mostly Unemployed Ex-Employees
In what could come as a rude shock to certain Microsoft ex-employees, the individuals the company fired as part of its recent workforce reduction schemes, as reactions to a deteriorating world economy, the company wants portions of the money it gave as severance packages back, which it finds as an overpayment caused due to an administrative error. As part of Microsoft's penny-saving schemes, the company sought to axe as many as 5,000 jobs, 1,400 of which were lost in this month alone.
Microsoft's human-resources department admitted to the error when working out and issuing severance packages to some ex-employees. If the ex-employees weren't unfortunate enough already for having lost their jobs, Microsoft now demands the portion of its severance package that is overpaid, back from its recipients. In a letter sent to all liable individuals, the company expresses sincere apologies as it asks for the overpayment to be returned. The letter is posted on Scribd and can be read here. Microsoft gives its ex-employees, most of whom are unemployed at the moment, 14 days to return the money.
UPDATE (02/24): In a fresh report by MSNBC, Microsoft admits to the fact that administrative glitches caused it to pay more severance than intended to some laid-off employees, and the company intended to ask for the overpaid amount back through private communication. The plan took a sour turn with a copy of the letter surfaced on the internet, turning out to be embarrassing for the company. Lisa Brummel, senior VP for human resources, in an interview to MSNBC shared some figures: only 25 out of the 1,400 recently laid-off employees were sent the letter, the degree of discrepancies measured around US $4,000~5,000 per odd payment. The executive reportedly called most of the 25 laid-off employees Monday to personally tell them Microsoft would not seek repayment after all.
Sources:
TechCrunch, MSNBC
Microsoft's human-resources department admitted to the error when working out and issuing severance packages to some ex-employees. If the ex-employees weren't unfortunate enough already for having lost their jobs, Microsoft now demands the portion of its severance package that is overpaid, back from its recipients. In a letter sent to all liable individuals, the company expresses sincere apologies as it asks for the overpayment to be returned. The letter is posted on Scribd and can be read here. Microsoft gives its ex-employees, most of whom are unemployed at the moment, 14 days to return the money.
UPDATE (02/24): In a fresh report by MSNBC, Microsoft admits to the fact that administrative glitches caused it to pay more severance than intended to some laid-off employees, and the company intended to ask for the overpaid amount back through private communication. The plan took a sour turn with a copy of the letter surfaced on the internet, turning out to be embarrassing for the company. Lisa Brummel, senior VP for human resources, in an interview to MSNBC shared some figures: only 25 out of the 1,400 recently laid-off employees were sent the letter, the degree of discrepancies measured around US $4,000~5,000 per odd payment. The executive reportedly called most of the 25 laid-off employees Monday to personally tell them Microsoft would not seek repayment after all.
40 Comments on Microsoft Severance Pay Blunder Costs Mostly Unemployed Ex-Employees
Yes, Microsoft did the calculations wrong, and some people got more money they they "deserved", why should Microsoft have to live with it? They didn't earn the money, so they shouldn't keep it. They should count themselves as lucky for even getting a severance package. Microsoft could have just handed them all pink-slips and told them to get the hell out without giving them anything(something that is becoming all to common in todays economy).
MS is not a monster for making an apology and requesting cooperation to fix an error. Obviously, they mis-fired the wrong person is all :laugh:
*sigh*... It's dissapointing when such unacceptable mistakes go unpunished.
Microsoft could also start building rubber duckies and word of the day toilet paper. But when you seek solid employment and get in at a reputable company you know at least you will get something if axed. Don't play robot here, I don't know how your economy is over the pond, but put yourself in their shoes. :shadedshu
And exactly what does AMD or VIA have in common with a company that makes operating systems? You just trying to fanboy jab in and draw attention away from that q6600 you have?
Im sorry for those that have lost their jobs, not only in M$ but for every company that felt it needed to let go of staff. $5,000 U.S is probably a years wage in some countries around the world. Yes the employees deserve to keep the over paid amount. Badluck Microsoft, and goodluck ex-employees in the future.
I wonder if Microsoft were using a Microsoft application to miscalculate the situation. Better to blame it on a random executive then on a Microsoft calculator.
Asides, it sounds like a pure accounting flub - probably by one accountant (25 ex-employees out of 1,400?). Said employee has probably been given the boot as well for the mistake, or at least bumped down a bit in the corporate ladder.
Personally, I feel MS is fully entitled to their money returned - and I also feel the ex-employees shouldn't be held fully accountable for a corporate mistake. I say MS should be able to collect 50% back, and let the axed keep the other 50% as a sign of good-will.
The mistake also meant that about 20 people were under-paid. I guess buy your guy's views, Microsoft should get to keep that money, right? I mean, people can't have their cake and eat it too. If Microsoft has to stick by the error that they made, then it doesn't matter if it is in favor of Microsoft or not.
The biggest reason that makes me think microsoft f'ed up, and the people can keep the cash is because I work in a garage. If you change the oil without customer consent, is he expected to pay for it anyways? But most certainly if the customer was entitled to an oil change and you didn't do it, but charged them, then they come back and you'd be changing the oil (and probably doing a little extra for them).
It's just a huge moral issue that no one can ever agree on, and microsoft was probably better off damage-control wise to let them keep the money than risk a battle of morals.
You're right about the employees not rightly deserving the money. Also, its nice to help a fellow working persoin (like a cashier) out and return money, because at the end of the day they will get into trouble.
But on the other hand, for microsoft that's two idiot moves in one event. We live in a society that values accountability. Microsoft f*ed up, and they should face the consequences... the managers who run the payroll process should either identify this as a special cause of variation and prevent it from happening again, or have their nuts in a vice right now because they run a process with an unacceptable failure rate.
But really? for $125,000?
When they say, "sorry you're going to be laid off, here's a severance package". They do not hand you a receipt with numbers on it showing why you are getting what you got. So now here your the guy thinking, "this blows I have to find a job in a declining job market." This sounds easy, anyone can find a job, even if it is McD's, but odds are having a nice job like that you got some expenses, a nice house, nice car or two, some kids. And a McD's job just isn't going to keep you from going bankrupt.
Now either way they were sitting here thinking, sweet I got this large sum of money! That doesn't matter when you know the whole job market is crap. They are most likely thinking how long this will get them buy till they find a decent job. Setting up plans and such, then MS comes along and says, sorry guys we need some of that back.
You go hand a homeless man $20 then go and tell him you want $5 back and see how that goes.