News

Microsoft Replies to Sen. Grassley on Job Cuts

• By Kurt Mackie
• March 03, 2009

In particular, Grassley questioned Ballmer about how many of the layoffs would involve foreigners hired under the U.S. H-1B work visa program, which allows temporary workers with the equivalent of Bachelor of Arts degrees to work in the United States.

The issue is a sensitive one for Microsoft. In March, Microsoft's Chairman Bill Gates told the House of Representative's Committee on Science and Technology that Microsoft couldn't get the skilled H-1B workers it needed.

"But as you know, our immigration system makes it very difficult for U.S. firms to hire highly skilled foreign workers," Gates told the committee, according to a transcript. "Last year, at Microsoft, we were unable to obtain H-1B visas for over a third of our foreign-born candidates."

In response to Grassley, Microsoft's General Counsel Bradford Smith said in a letter published on Tuesday that Microsoft doesn't know how many of the workers to be let go will be H-1B visa holders because the 5,000 personnel cut will take place over 18 months' time.

Microsoft let 1,400 workers go in January as part of the planned cuts, and Smith said that "over 800 [of those 1,400 cuts] were in Washington State." H-1B visa holders were also included in the January cuts, but Smith didn't provide a specific number.

"Workers on H-1B visas and other temporary work visas make up only a small percentage of our overall workforce, but they were also among the employees impacted by the reductions announced in January," Smith wrote in the letter.

The total number of H1-B employees at Microsoft is "less than 15 percent of Microsoft's U.S. workforce, [which is] the level that is used in immigration law to determine whether a company is 'H-1B dependent'," Smith explained. About 90 percent of H1-B visa holders work in "technology and engineering positions," he added.

Smith explained that while Microsoft's plans are to cut 5,000 positions, it also plans to "create 2,000 to 3,000 new jobs" during the same 18-month time frame. So, Microsoft will actually cut 2,000 to 3,000 jobs in that period.

Grassley, in conjunction with Sen. Dick Durbin, D-Ill., is sponsoring an H-1B visa reform bill that attempts to crack down on H-1B work visa fraud. One of the provisions in that bill is that H-1B workers get paid the prevailing U.S. wage. In an apparent response, Smith denied that H-1B workers get paid less than U.S. workers at Microsoft.

"As I'm sure you'd expect, we take care to make all employment decisions -- including the termination of employment for any individual -- in a manner that complies with Title VII of the Civil Rights Act of 1964. In addition, we do not base compensation decisions in the U.S. on an employee's citizenship," Smith wrote.

While Grassley wants H-1B holders to be cut before U.S. citizens, the issue is a red herring for him given that Grassley has supported so many "free trade" agreements over the years. An Economic Policy Institute analysis found that the NAFTA free trade agreement alone resulted in the loss of "879,280 U.S. jobs" over a nine-year span.

Microsoft has lately adopted some PR efforts following its January layoff announcement. Last week, the company announced a Microsoft Elevate America program in which Microsoft is working with various state and local governments to train workers.

Pamela Passman, Microsoft's corporate vice president for global corporate affairs, told a panel of governors in February that Microsoft is issuing one million Microsoft training vouchers for the Elevate America program and plans to train over two million people over the next two years.

Passman on Tuesday mentioned other Microsoft efforts that aim at increasing technology skills worldwide, as described in Microsoft's "Corporate Citizen Report." Those efforts include Microsoft's Unlimited Potential and Partners in Learning programs.

In addition, for IT professionals, Microsoft recently created a new career Web portal called Thrive.