Microsoft backtracks on severance issue
This story was updated at 3:45 p.m. PST with an official statement from Microsoft.
Amid a wave of criticism, Microsoft is backtracking on a decision to require laid off workers to pay back money that the software maker said was in excess of its planned severance, CNET News has learned.
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Over the weekend, Microsoft confirmed it had overpaid severance to some workers and underpaid others. At the time, the company did not say how much money was involved, but sent the workers who were overpaid a letter saying they would be required to pay back the money in excess of the severance they were due.
On Monday, Microsoft human resources chief Lisa Brummel said the company was reversing course.
"I thought it didn't make sense for us to continue on the path we were on," she told CNET News. Twenty-five workers were overpaid and about 20 underpaid, Microsoft said.
Brummel said she has spoken or left messages to most of those affected.
Brummel said those overpaid received, on average, about $4,000 or $5,000 in extra pay.
"I have called now 22 out of the 25 impacted employees, only because I haven't had time to get to the three but I will after we hang up," Brummel said.
In general, Brummel said it makes sense for companies to recover money if it makes an accounting error, but she acknowledged the situation was an extraordinary one. Brummel said the company actually overpaid her at one point during her long tenure.
"It actually happened to me and I wrote the company a check," she said. "It may have happened to others."
Later on Monday Microsoft issued the following statement about the matter:
Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. This was a mistake on our part. We should have handled this situation in a more thoughtful manner. We are reaching out to those impacted to relay that we will not seek any payment from those individuals.
Microsoft also said that the company is immediately reimbursing the underpaid employees.
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
(...kinda wondering how the number went from an estimated 1400 down to "twenty five", but okay - confirmation trumps rumor).
Hopefully the underpaid folks get paid-up.
Now - where's dhavelek and his insistence on hiding behind some superfluous SarbOx "requirement" as an excuse for them to not just own up to their goof and let it slide? For that matter, where are all the MSFT defenders and their hot insistence that MSFT ruthlessly demand the dough back?
Cue the spin-doctoring in 5... 4... 3... 2...
Sounds like MSFT took your advice/demands to heart and are addressing the issue.
So you're right- it wasn't nearly as bad as you made it out to be.
Glad MSFT took my advice too (though even when I wrote it, I stated that they didn't have much choice. ;) ).
Microsoft comes out of this with good PR results. How the heck did THAT happen? I would not have predicted this as a result.
I guess I was wrong about Sarbox. You were wrong about everything else though.
Of course they will, why wouldn't they?
The exec's need to write a check too,.
Seeing as how they are WAYYYYYYY overpaid.
They were going to pay the underpaid all along I am sure you just did not hear about it because anytime people can take to bashing MS they will.
What really *************************** to ask for it back. And would have kept at it had they not been outed.
It's not something I don't think anyone could have predicted.
That first line should read: "And yet they got some PR out of it in a positive light," Even that is bad sentence structure. :P
We were laid off less than 1 week after Steve Jobs told the entire company on closed-circuit TV that there would be NO LAYOFFS.
My stock options were literally STOLEN by Apple Computer Inc. and when I took them to court, they lied through their teeth and had apparently bought everyone at Palo Alto superior court. Steve Jobs, who had been served, of course got special privileges and never showed up.
He never explained himself on why he lied to us and why my stock options, given to me for good performance were STOLEN, years onward. And I wonder how they stay in business when they keep college dropouts as engineers to play games all day, and let go educated and productive people.
A couple of months after the lawsuit, Apple decided to "investigate" itself and of course, claimed Steve was innocent. They have so far paid out $14 million for this act of fraud and vicitims like myself still havent been compensated.
[CNET editor's note: Inappropriate material has been removed from this message]
Wow! A story about Microsoft that doesn't have an Apple angle on it and YOU provide the link.
Thank you for your tireless....
No, wait. That should be witless.
If you were capable of seeing the connection then you probably wouldn't have been dumb enough to pay $4000 for your little mac, for no other purpose than so it can sit on your desk and look cute...
MS is taking a $90,000 hit. (Approximately.) That's a drop in the bucket for them.
*poof* You know what that was? Them recouping the loss, with a hefty dose of goodwill from Joe User for "taking care of their people in spite of the recession."
There are quite a few people who had been jailed for spending money in their Savings or Checking account because the money they spent was the Bank's money that was transferred to them due to similar accounting or technical error.
Microsoft is being extra generous by doing this (mostly because they don't want the extra negative publicity).
> error, but she acknowledged the situation was an extraordinary one. Brummel said the company actually
> overpaid her at one point during her long tenure.
> "It actually happened to me and I wrote the company a check," she said. "It may have happened to others."
Wrong! You cannot compare Microsoft overpaying your executive bonus to what you did to these people. Unless you were laid off due to no fault of your own, had limited savings, and worried how you were going to stretch your severance money to cover your rent or pay your mortgage, and feed your family while you wonder where you're going to find a job in this economy before your money runs out, then you have NO IDEA what it's like... and IT DID NOT HAPPEN TO YOU!
If this was any other company no one would have cared and no one would have raised a stink about it.
The bottom line is that most people that are going through layoffs are going through hardship. You don't dangle money in front of someone in this situation and then take it away. And the fact that this was being done by one of the most profitable software companies in the country is just awful. Microsoft had no problems with handing millions of dollars to Jerry Seinfeld to make ads that no one understood (like Jerry Seinfeld really needs more millions), while it lays people off and then tries to get back $4000 from their former co-workers that are going through hardship.
People who got what they were supposed to get did not get screwed. You could claim that people who got a little more than they should have were "fortunate." But fortunate is in quotes because anyone who got laid off is not fortunate. Taking away something that a person needs AFTER YOU GAVE IT TO THEM is not something you do in this situation. Period.
It has nothing to do with any notion of fairness to others, because as I argued, there is nothing fair to anyone about any of this. Everyone did not receive the same severance payout. Is that fair? You got a certain number of weeks pay for each 6 months you were at the company. And if you were at a higher level, you got more weeks of pay per each 6 months. Is it fair that someone who was with the company for 6 months and a day gets two more weeks severance than someone who was at the company for 5 months and 29 days? Is it fair that someone whose salary is higher gets more? Is it fair that someone at a higher level job gets more? Is it fair that someone who is single with no dependents gets more money than someone with a family to feed? The severance formula is based on arbitrary factors that someone came up with -- the fairness of the entire formula can be called into question. Your "fairness" argument does not hold because you cannot apply a fairness principle to just one part of the entire equation.
At least we are in agreement that the vast majority of people received what they should have received. What we are having differences on seems to be that you feel that random lotteries are an excellent way to determine the contents of a severance package. I personally feel that these packages should be based on more refined metrics. Is it fair that someone who worked at MS for 10 years is getting a bigger payout that someone that worked there for 6 months? Yes, I would have to say that it is. Is the fact that a senior engineer will get a bigger severance package than an assistant janitor fair? I'd have to say that is fair as well. Is the fact that some small number of people randomly 'won' a bigger severance for no real reason fair? No. Its not because its not based on any aspect of their work, performance, or longevity. It's not even arbitrary - its random and it isn't fair, equitable, or justifiable.
Look, losing a job sucks but its not like its some sort of unique tragedy that demands outrage. It is, like it or not, a normal part of a person's working life. What isn't normal is being handed a lump of cash by accident and then screaming because you have to give it back. That's just juvenile screw everyone but me unjustified entitlement whining.
So with this same logic I find it funny they act so money pinching against people who are not rich.
I'm always amazed at the total lack of common sense that many business managers have... This stuff is taught in basic management classes... seriously, Microsofts actions will be a case study in a management textbook of what NOT to do in the first place, but how to recover from a stupid mistake. Just bite the bullet.
Try to survey all companies and see how many of them made a single accounting error in their existence... I'd say probably most if not all.
Mistakes happen. If an accounting department makes this mistake, that doesn't make them incompetent. Ask your self, have you *ever* made any mistake in your job? If your answer is yes, then why should we treat Microsoft employees any differently?
How is that different from the bank analogy? You see 5k extra money that you did not earn when you checked your balance in the ATM. Are you free to withdraw that sum? It's so wonderful to "assume" that the bank just "intentionally" gave you that free money even when they come knocking to your door asking for you to hand it back?
Also, if you don't know all the facts, how do you expect to make a credible conclusion about the competence or incompetence of MS employees or MS itself? "Incompetence" is a very strong word, use it lightly and it loses its meaning or strength.
Sometimes a mistake is just a mistake.
If you did your best to make sure you don't make a mistake and you still did because of some factors beyond your control, a judgment call (a mistake that anybody can make - even by competent folks like you), then it is just a mistake whether losing $1 or $1M for a company. If it's a mistake because of incompetence, being irresponsible or sloppy, then it's not a mistake. It's also irresponsible and maybe illegal in some cases to fire somebody with no other information than he made a mistake that lost the company 60k (without due process).
February 24, 2009 10:20 AM PST
I think the ones who were overpaid should pay the money back. I know they had knowledge they were overpaid and it is not their money. It belongs to Microsoft. I knew the morals of this country were going in the sewer but I did not think we were there yet. I was wrong. Maybe these overpaid people will someday have some of their own money stolen from them.
---------------
Response:
Maybe someday you will be laid off from your job by a hugely profitable company at a time when jobs a few and far between resulting in you and your family struggling to survive?you a$$.
Who is stealing from whom all depends on which side you look at it.
I agree. This is no more difficult a moral dilemma than one faces at a supermarket checkout stand and finds the employee handed you a $10 bill in change instead of a $1. You let them know there has been a mistake and correct it.
Very simple.
To those who moan that Microsoft's blunder shouldn't be recompensed simply because they are a "BIG" corporation and have gobs of money, I say if the principle applies in the small cases for the small fry, it applies for the big fry too. It's called equity under the law and it is MUCH more important than trying to satisfy some mean spirited sense of "stick it to 'da man!" mentality.
IMO, once my employer gives me a check, it's mine to spend.
Punish the people who sent out the checks (i.e., those who didn't do their jobs right and cost MS *AND* those employees huge embarrassment and inconvenience).
- by pentest February 24, 2009 7:17 PM PST
- Why does MS always need an avalanche of bad press before they make the right decision.
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- by CrashPad63 February 25, 2009 8:05 AM PST
- Actually the question should be is there any company so scrutinized as MS. My God Im suprised we havent heard about the shameful waste of toilet paper at the Redmond campus! You trolls really should find a greater purpose in life than hounding a business for profit. After all this is a capitalist country and you name me one business that is not in it for the money.
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Showing 1 of 2 pages (57 Comments)Is there any other company that is so adept at shooting their foot off?