Microsoft Severance Pay Blunder Costs Mostly Unemployed Ex-Employees

[btarunr]

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.

View at TechPowerUp Main Site

 

[Haytch]

In this day and age that we live in, i like to look at the bright side of everything, for example . . . The millions of unemployed people whilst the Microsoft staff was living in comfort, or how only recently these unemployed Microsoft staff members have joined civilization. What most people cant see because of the brainwashing, is that the current global financial situation has always been the case for most humans and always will be. They only call it a global issue when the major companies are at risk. Ex-Microsoft staff, it was good while it lasted and you should all be gratefull the government will give you other peoples tax as an unemployment benefit, regardless of your tax scams.

 

[newtekie1]

Haytch, everyone that works at large corporations is not an executive. They have jobs so suddenly they aren't part of civilization? Please... Despite what the media tried to have us believe, the large majority of people are not unemployed.

 

[tcorbyn]

This makes me sick! M$ fucked up and they should be the ones to live with the consequences. Not ask the poor folk who have just been laid off for their money back? MADNESS!

 

[newtekie1]

This makes me sick! M$ fucked up and they should be the ones to live with the consequences. Not ask the poor folk who have just been laid off for their money back? MADNESS!

What is madness is that Microsoft is already paying these people a huge amount of money just for being let go, and 10 days later Microsoft realizes they shouldn't have gotten quite so much and people are freaking out about it. I wish I could get paid for doing nothing other than losing my job.

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).

 

[turtile]

It looks like Microsoft got rid of the wrong group of people! How can they take the money back? What if they don't have it?

 

[Silverel]

Keep in mind, this is just a request letter from Microsoft. Further action would have to be taken legally, and through the courts. Ask yourself, would you want to pay court fees while unemployed? From what I understand, the severance package (minus the mix-up), is still rather generous. It's not like these employees are unskilled either, they should be able to find work with relative (to the current economy) ease.

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

 

[1Kurgan1]

Can they really demand this money back? I suppose they got it in some contract somewhere that you have to sign to be employed that they can do this crap.

 

[DrPepper]

I bet if this happened at via or amd there wouldn't be half the outrage.

 

[newtekie1]

It looks like Microsoft got rid of the wrong group of people! How can they take the money back? What if they don't have it?

It has only been 10 days since the mistake, so they better still have the money. I would hope they wouldn't spend their entire severance package in 10 days. What do you think they did, go on a huge bender in Vegas?

Can they really demand this money back? I suppose they got it in some contract somewhere that you have to sign to be employed that they can do this crap.

It doesn't need to be in a contract, most states require any overpayment to be returned as long as the error was caught and the people were notified in a timely manner. I'd say 10 days is timely enough.

 

[Baum]

and sometimes you get money if you where long time employed

 

[viczulis]

yea newtekie said it all it should be returned. Mine only question is does the guy who made the mistake still have a job. LOL

 

[phanbuey]

Either they are being "nice" or they have messed up the severance calculation in the agreement, which will make it difficult to collect. On the other hand, they would not risk such bad publicity unless they had a very good shot at collecting the money.

*sigh*... It's dissapointing when such unacceptable mistakes go unpunished.

 

[DrPepper]

I see it like this. Microsoft could have said gtfo without giving them anything and no one would really care except those who lost their jobs. While what has happened is Microsoft have said gtfo and here's money but there was a mistake somewhere and gave them money they didn't owe them which means they should get it back wether they are unemployed or not.

 

[newtekie1]

*sigh*... It's dissapointing when such unacceptable mistakes go unpunished.

Agreed. I'm going to bet this somehow just gets blamed a computer glitch in the end because no one is going to want to take responsibility...

 

[L|NK|N]

Interesting turn of events. http://www.msnbc.msn.com/id/29353191

 

[1Kurgan1]

I bet if this happened at via or amd there wouldn't be half the outrage.

I see it like this. Microsoft could have said gtfo without giving them anything and no one would really care except those who lost their jobs. While what has happened is Microsoft have said gtfo and here's money but there was a mistake somewhere and gave them money they didn't owe them which means they should get it back wether they are unemployed or not.

Either side of the fence it doesn't matter. These are people loosing their jobs, YEAH MICROSOFT LOST SOME WORKERS THATS SWEET! That really doesn't apply here, that really blows.

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?

 

[Triprift]

Indeed now they can keep the over paid money looks like MS is in damage control on this one.

 

[Megasty]

Well, there's no way in hell I'm backing up MS in this blunder. Looks like the accountants over that needed to get canned as well, but I'm sure they already are.

 

[PVTCaboose1337]

I'm glad Microsoft finally did the right thing.

 

[Haytch]

Your right Newtekie1, the majority is not unemployed and everyone that works in a large corporation is not an executive but the poorly allocated pay checks have helped bring upon this situation.

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.

 

[imperialreign]

If it wasn't for how the economy here has been, I doubt MS would've requested the overpayment back in the first place . . . perhaps if anything, simply a portion of the amount . . . but probably not the whole amount overpayed.

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.

 

[newtekie1]

So in the end it effected a whole 25 people, and the amount was between $4000 and $5000, that has to be one huge severance package for a mistake to be that large in sum.

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.

 

[ascstinger]

It's really a moral issue more than anything, like if the cashier hands you a $100 instead of a $10, do you go back and give them $90 back.

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.

 

[phanbuey]

So in the end it effected a whole 25 people, and the amount was between $4000 and $5000, that has to be one huge severance package for a mistake to be that large in sum.

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.

Wow...$125,000 who cares? the fact that microsoft tried to pursue this issue and take the risk of bad publicity? for a max of $125,000!?!?!? they spend more for happy hour on the execs than that!

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?