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Microsoft cutbacks spreading to bigger population of contractors
Microsoft's cutbacks are starting to spread to the larger group of contractors who work on projects for the company through outside vendors -- commonly known as "v-dash" workers. It's not clear how widespread the cuts will be, but some Microsoft vendors have been contacted by internal teams about cutting the budgets for projects currently under way by as much as 15 to 20 percent.
A Microsoft spokesman confirmed that the company's cutbacks will affect "v-dash" projects but declined to give further details. A closer look at Microsoft's last quarterly earnings call shows that Microsoft CFO Chris Liddell briefly referred to this possibility, saying the company planned to "significantly reduce our vendor and contingent staff expenses."
The broader cutbacks for the temporary workforce come in addition to as many as 5,000 layoffs, elimination of merit pay raises, and other cost-saving moves affecting the company's direct employees.
"As Chris Liddell noted during the Q2 earnings call, we are taking a series of measures to manage our costs, including a reduction in spending on vendor and contingent staff," spokesman Lou Gellos said via email today. "We have no additional details to share at this time."
The cutbacks disclosed last week affected employees who work at the company through temporary agencies, commonly known as "a-dash" workers. Microsoft is cutting by 10 percent the amount it pays the agencies for those a-dash workers on current assignments, and reducing the target billing rate by 15 percent for future assignments.
"A-dash" workers are much smaller portion of the company's contract workforce, according to a post this week by Ben Romano of the Seattle Times. His report cited recent numbers showing about 7,200 "a-dash" workers, compared with more than 70,000 in the "v-dash" category. V-dash work is typically more project-oriented, with workers managed more directly by the vendors.
But as with the a-dash workers, budget cuts for vendor projects would likely result in pay cuts for the v-dash workers.
We're still digging for details on these cutbacks. Anonymous tips welcome at toddbishop@bizjournals.com.
About Todd Bishop
Todd Bishop is co-founder and managing editor of TechFlash. He has covered Microsoft and the technology industry for more than five years, most recently as a daily newspaper reporter and blogger based in Seattle.
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