Published May 9, 2009

Microsoft cuts loose dozens of S'pore staff

But bitter pill is sweetened by attractive severance package

By WINSTON CHAI

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MICROSOFT'S local employees dodged the first bullet but could not escape the next, as the economic downturn continues to crimp technology spending by businesses and consumers.

MR BALLMER Microsoft nearly done with planned 5,000 job eliminations worldwide by June 2010

BT understands that dozens of Singapore-based positions were axed this week under the second phase of a plan to cut 5,000 jobs worldwide by June next year.

Singapore currently plays host to more than 600 Microsoft employees across three divisions - Microsoft Singapore, Microsoft APAC (Asia-Pacific) Regional HQ and Asia-Pacific Operations Centre. Besides permanent staff, the company hires a sizeable number of contract workers here.

Microsoft declined to reveal the number of Singapore employees affected by restructuring, but sources said that this week's retrenchments - which hit mostly mid-level staff and below - cut across all business units and may have accounted for 5-10 per cent of the overall staff base.

'Some positions in Singapore were included in this round, and they are across all three entities,' a spokeswoman confirmed.

'Overall, these positions represent a relatively small proportion of our team - but this is a not a decision we take lightly.'

Globally, 3,000 Microsoft employees were given pink slips this week. The sackings came after 1,400 jobs were culled worldwide in January, in a first wave of downsizing that resulted in only a few local lay-offs.

Affected workers in Singapore received their notices on Wednesday, after an e-mail from Microsoft chief executive Steve Ballmer the night before. They have been given one- month's notice to wrap up their current assignments. 'With this announcement we are mostly, but not all, done with the planned 5,000 job eliminations by June 2010,' Mr Ballmer said.

The company is set to cut a further 600 over the next 12 months to meet this global mandate.

In Singapore, the bitter pill was sweetened by an attractive severance package that went significantly beyond the typical compensation yardstick of one month's pay for every year of service.

'It (the package) was much better than I thought,' a retrenched Microsoft Singapore worker told BT.

Microsoft said: 'We are providing employees with competitive severance packages, an outplacement programme to help them find new jobs and 24-hour counselling services.'

Weighed down by the global computer slump, the world's largest software maker saw quarterly sales dive for the first time in its 23-year history as a listed company the US.

Microsoft's third-quarter revenue fell 6 per cent to US$13.7 billion, while net income plunged 32 per cent to US$2.98 billion.