Microsoft has reversed course on the severance check snafu, issuing a statement today saying that laid off workers who were mistakenly overpaid will not have to repay the amounts owed.

“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,” the statement said.

In an interview, Microsoft senior vice president of human resources Lisa Brummel said she's been calling each of the 25 workers who received overpayments to apologize. The overpayments ranged from about $200 to more than $5,000, said Brummel. That equates to an average of about $100,000, a tiny fraction of Microsoft's $20 billion cash horde. 

Brummel noted that 20 people were also underpaid, with that error discovered and corrected immediately.

"This is the first time that we have ever done anything large-scale like this. For a first version of something, I would say all things considered, we did a reasonably good job," said Brummel. "Unfortunately, this what I will call a small error -- but I am sure not to the individuals. Forty five out of 1,400 is unfortunate. But I think it just causes us to say we need to double check process along the way, particularly as it relates to what people get paid."

How did this happen? Brummel said a "clerical error" led to the overpayments in the 25 severance checks. Typically, when Microsoft overpays for bonuses or other compensation it asks that workers pay back the difference, a procedure that took effect in this scenario.

"Normal business rules kicked in and they got a letter that said, 'Hey, you've been overpaid, we would like you to pay us back," explained Brummel. "I was alerted to the situation over the weekend and I said, you know, I don't think normal business practice should happen here. I think this is a unique situation with a unique set of people. My preference is that we not ask people to pay back the overpayments. The clerical error was on our end. We should absorb the burden of that." 

The company is looking to put procedures in place to make sure that similar snafus don't happen again. "During a situation where jobs are eliminated -- when we do come across what I will call a normal business rule that could result in an impact to an employee -- I will be notified sooner," she said. "And I will be the ultimate arbiter of whether we follow normal business procedure or change plans."

Asked whether the staffers who made the decision to send the letters will be held accountable, Brummel said: "I do hope we live in a world where people can occasionally make mistakes as long as we correct them the right way." The company does plan to go back through the process step-by-step to understand where there was human error and process problems, she said.

The public relations hit that Microsoft has taken over the past three days did not play a role in the decision to waive the overpayments, Brummel said.

She said talking to the affected employees has been a "wonderful experience."

"I haven't come across one yet who isn't positive toward Microsoft and they appreciated the gesture," she said. "Of course, they appreciate not having to pay the money back. And for them, I think it was a lot of relief to have this issue closed. They all seem ready to move on to their next step, which is a good thing. I was actually really happy to make the calls."