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Wednesday, May 26, 2004 - Page updated at 01:04 A.M.
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Microsoft workers vent over cuts in benefits

By Kim Peterson
Seattle Times technology reporter

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Has the Kool-Aid at Microsoft gone bad?

Employees are incensed over cuts in benefits announced last week, according to an internal survey posted on one worker's Web site. When asked to post comments on the cuts Monday, many of workers railed against the company, its management and its policies.

"Microsoft's benefits used to somewhat make up for what is a difficult place to work," wrote one poster. "Are we now going in the direction that it will be both difficult and unrewarding?"

The comments were posted anonymously; as a result, they may not accurately reflect the overall employee sentiment.

They do, however, give some insight into frustration, and possible declining morale, among Microsoft employees, generally a group that, at least in public, is so positive about the company that they are sometimes described as "drinking the Kool-Aid."

The phrase refers to maintaining a steadfast, wholehearted belief in something, such as an employer.

Microsoft announced last week it would reduce some employee benefits in its effort to cut costs. The changes include a new $40 copayment on certain brand-name prescription drugs and a shorter window of time to take paid parental leave.

The company also cut vacation time for new employees from three weeks to two weeks a year for the first two years.

The internal survey, posted online by an employee identified as Ben Hansen, a product manager, specifically asks for opinions on the changes to the employee stock-purchase plan. Employees have been able to buy Microsoft shares at a 15 percent discount off market price, but the discount will drop to 10 percent beginning July 1.

Furthermore, the discount will be based on the final closing price at the end of each quarter. Previously, the price was based on either the share price at the beginning or end of a designated time frame, whichever was the better deal.
Microsoft has said it expects the stock plan's changes will save $60 million each year.

According to the survey, about 1,520 workers had responded by Monday afternoon. Of that total, 93 percent said they were either very dissatisfied or dissatisfied with the changes to the stock plan.

Four percent said they were either very satisfied or satisfied; the rest gave no answer.

When asked if the changes reduced their overall compensation, 33 percent said they expected a significant reduction and 51 percent said they expected a moderate reduction. About 13 percent expected a little impact, and 1 percent expected no impact. The rest gave no answer.

Hundreds of employees submitted additional comments. A copy of the survey was distributed to local media yesterday by the Washington Alliance of Technology Workers, a Seattle labor group focused on high-tech workers.

"It's not like this is a small number of employees that are concerned about this," said Marcus Courtney, president of the group. "A significant number of Microsoft employees are very upset that the company is cutting their pay to improve the overall bottom line."

Microsoft spokeswoman Tami Begasse said the survey had been taken down by yesterday afternoon, but she didn't know why. Hansen, who referred calls yesterday to Microsoft's public-relations department, was not reprimanded or punished, she said.

"We really do encourage employees to share this feedback," she said. "It's part of our DNA."

There is plenty of feedback for Microsoft. Hundreds of employees posted comments, and a few even praised the stock purchase plan's changes. In general, though, the comments have one recurring theme: The cuts are leading to a drop in morale.

Employees had especially harsh comments for Microsoft's management, pointing out that the company has more than $50 billion in the bank.

One person recalled that Microsoft forgave a $15 million loan to former President Rick Belluzzo when he resigned in 2002.

Others said Microsoft should instead cancel its annual employee meetings at Safeco Field, stop printing the internal newsletter and save electricity by turning off the lights at night.

"It makes me wonder what cuts are next," one employee wrote.

"Microsoft continues to make more and more money every quarter, yet they are cutting employee benefits? That doesn't make much sense."

Kim Peterson: 206-464-2360 or

Copyright © 2004 The Seattle Times Company

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