Even with US$60 billion cash in the bank, Microsoft Corp is telling employees they're not immune to corporate cost-cutting.
Microsoft told employees in an e-mail this week that it is trimming some benefits -- including reduced prescription drug coverage and employee stock discounts -- to save money.
PHOTO: REUTERS
The software giant will continue to offer perks such as free sodas and gym memberships, and the company says its benefits are still generous.
But they won't be as lavish as in years past. John Connors, Microsoft's chief financial officer, recently told employees the company hopes to save as much as US$1 billion in its next fiscal year, which ends June 30 next year. In addition to trimming benefits, Microsoft plans to combine some operations, make business units more efficient, and reduce spending on such things as travel, computers, catering and entertainment.
Microsoft spokeswoman Tami Begasse would not say how much the benefits reductions would save.
Marcus Courtney, president of the technology worker advocacy group WashTech, called the move "just the tip of the iceberg of what's to come for Microsoft employees" and said it showed a lack of respect for employees' contributions.
He said WashTech, which has made informal efforts to unionize Microsoft employees, had heard from a handful of workers unhappy with the change.
Analyst Charles Di Bona of Bernstein & Co. said shareholders should applaud the move because it shows a willingness on Microsoft's part to cut the "fat" from its budgets to make up for the lulls between big, revenue-producing product launches.
"It really does signal that they're starting to watch the operating expenses, which is a good thing," Di Bona said. "Every company should do that. There's no reason to waste money."
One of the principal cost-saving changes involves an option for employees to purchase discounted shares of company stock.
Currently, employees may buy stock for 15 percent less than the market price as calculated at either the beginning or the end of a designated period, whichever is lower. There have been two such periods with the `"look-back" provision each year. Starting July 1, the discount will be reduced to 10 percent and the price will be based solely on the closing share price on the last day of each quarter.
Microsoft earlier halted a stock option plan that once made many employees millionaires but in recent years yielded little because of stagnant share prices. It now gives employees smaller amounts of stock outright.
The benefits cuts come the same week that Microsoft hosted its annual conference for about 100 chief executive officers from around the world -- with a major focus on improving employee productivity to save money.
In a keynote address on Thursday, Microsoft chairman Bill Gates acknowledged that computer security woes have been a "drain on productivity."
Microsoft has turned much of its attention to improving the security of its software, amid repeated Internet worms and viruses that have attacked Microsoft Windows-based computers and slowed business throughout the world.
"Should we even sleep at night knowing that there are malicious people trying to attack these things ... and they're having some success?" Gates asked..
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from