TELECOM Digest OnLine - Sorted: Microsoft Tells Contract Workers to Take Week Off to Lower Costs

Microsoft Tells Contract Workers to Take Week Off to Lower Costs

Reuters News Wire (reuters@telecom-digest.org)
Mon, 22 May 2006 21:08:42 -0500

Microsoft Corp. told more than 1,000 contract workers doing software
development and testing to take seven business days off without pay to
lower costs during this quarter, the company said on Monday.

Earlier this month, Microsoft asked half of the technology vendors it
uses for software development to defer seven business days worth of
work including this week, to the coming fiscal year starting July 1,
said company spokesman Lou Gellos.

The software giant emphasized it was not over-budget, but certain
divisions needed to pare back some costs in order to stay on
budget. Microsoft said these types of cut-backs are a common way for
technology companies to manage costs.

"It is fairly common within the industry, but not that common for
Microsoft," said Gellos, who declined to be more specific about what
areas of the company were involved except to say that the development
was "not critical."

Microsoft shares have fallen 16 percent since the company said
earnings would be hurt by increased spending next year. Analysts
estimated it will spend $2 billion more in fiscal 2007 than
expected. The stock rose 32 cents to $22.88 on Monday.

Microsoft employs over 63,000 workers worldwide, but it would not
comment on the number of contract workers it uses.

Copyright 2006 Reuters Limited.

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