Microsoft stands by cuts in benefits

Update: Microsoft was embarrassed by the response to its benefit cuts--as they should have been--but aren't backing away from them. So much for 'listening to employee feedback'.

By TODD BISHOP
SEATTLE POST-INTELLIGENCER REPORTER

The man in charge of Microsoft Corp.'s worldwide personnel efforts didn't exactly expect employees to celebrate the company's decision to scale back aspects of its benefits package. He knew it would be tough news for many of them to swallow.

But Ken DiPietro says he was still a little surprised at how the response unfolded, with thousands of employees expressing their displeasure in what became a very public manner.

"I feel badly about it. I understand the emotion attached to it," said DiPietro, Microsoft's corporate vice president for human resources.

"I think we probably could have done a much better job internally of messaging and communicating the changes and giving a little bit better context."

Those changes include less vacation time for new hires, a smaller discount for employees on Microsoft stock and the introduction of a co-payment for certain brand-name prescription drugs.

Employees, in an unusual display of dissent, strongly criticized the cuts in an informal, internal poll that was leaked to the media and reported widely last week.

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More than criticizing the announced changes, however, some employees worry that the cutbacks are a sign of things to come -- as Microsoft tries to reduce expenses in a broader effort to improve profit margins as revenue growth slows.

DiPietro did not put that issue to rest. "I'm not going to comment on that. The reality is that every year we look at the total portfolio of compensation and benefits that our employees enjoy, and we make modifications in those elements -- or not, depending on what the data says and what the surveys say and what employee feedback is."

But despite the employee reaction to the latest announcement, the company doesn't plan to reconsider its plans, he said. He cited the work that led to the decision, including market research, employee focus groups, surveys and other measures.

More on this later--there are ramifications for both workers and taxpayers in part of this plan. (To read the rest of the article, click the title.)