Let them eat popcorn -- but not at the company picnic

How Microsoft is turning its employees into second-class (and third-class) citizens.

By Paul Rogat Loeb
May 30, 1997 11:00PM (UTC)
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SEATTLE -- The computer industry's long been fond of outsourcing. Software coders in Calcutta. Tech support in Tucson. Order fulfillment from Columbus, Ohio.

But Microsoft, as usual, is breaking new ground.

First, the world's largest software company contracted out corporate security, janitorial services and landscaping to outside companies. Then the physical manufacture of software disks and CD-ROMs and several technical support centers, followed by the mail rooms, copy center and the shuttle that runs employees between different buildings on the Redmond campus. Workers who draw their paychecks through outside temp agencies constitute most of the company's Interactive Media Group -- which includes multimedia projects like the Encarta encyclopedia and the online "shows" of Microsoft Network (MSN) -- even though some of these workers have worked at Microsoft for as long as a decade. All told, 6,000 employees -- a third of the Microsoft work force -- are outside vendors or contract workers.


Now, the company's just laid off all its receptionists. They can reapply for their jobs through an outside contractor, called Tascor, but will no longer get benefits as Microsoft employees.

This last action has proved especially troubling, even for regular employees. "I realize it's legal, but is it moral?" wrote a 10-year Microsoft veteran in the company newsletter, MicroNews. "We hire people and agree that if they do a good job they will have a job with Microsoft. Then someone says you can work for another company doing your current job or quit, your choice ... How can a group of people really work in the best interest of Microsoft when treated this way? ... What about the human costs? What message is the 'corporation' giving to the rest of us?"

Answering phones, taking messages and greeting people is not a "core competency" of the company, responded director of real estate and facilities Nick MacPhee in the newsletter. "The foundation of Microsoft's success has always been to focus on what we do best." MacPhee was unavailable for direct comment. "He has limited bandwidth available," explained Microsoft public relations spokesman John Pinette. But Pinette stressed that outside vendors like Tascor are specialists in a way that Microsoft can't be. "They understand the management of people like receptionists."


While Microsoft's industry reputation is hardly warm and fuzzy, its own employees have been treated to generous portions of the company's wealth. You may only be a secretary or clerk, but because you helped build the company in those first critical years, your work was spectacularly rewarded. Workers who opened the mail or ran the copy machines didn't do as well as programmers and managers with special options, but still, Microsoft has produced several thousand millionaires -- with many more to come in the next few years as the stock options of new waves of employees become vested. At Microsoft, the rising tide really did lift most boats.

Now, like the rest of America, Microsoft -- which insiders now call "Macrohard" -- is becoming divided between the blessed who ride high at the yacht club and those who are barely surviving. For the newly demoted vendors and contract workers, it means no stock options, no participation in the company's lucrative retirement plans (though some do have access to the retirement plans of outside vendors like Xerox), minimal medical benefits and no paid vacation, sick days or holidays. And on some satellite campuses, no parking in the company lot. Of course, they can forget about the off-campus health club, discount software or books at the company store, the annual picnic and Microsoft Night at the Seattle Mariners baseball game. One upside: If you're a gal, you'll probably be invited to Microsoft's singles events, reportedly because "all the geeky programming guys want to go after the single contractor women."

Microsoft's "temps" are also branded by different color badges and distinct e-mail prefixes. They have been told to stay off the company soccer fields and basketball courts and refrain from discussing their pay with other employees. They can be fired at will with neither notice nor severance pay -- as were several hundred MSN contract workers in February when their online "shows" were canceled. "The role of labor in media is accordion in nature," explained MSN executive producer Bob Bejan at the time.


Microsoft hasn't yet established separate but equal drinking fountains or required employees to show proof of permanent status before snacking from the free popcorn and soft drinks on campus. But earlier this year, contract workers received specific notices not to use Microsoft e-mail for personal purposes -- especially not to look for permanent Microsoft jobs. The company also said that any raises above 5 percent require administrative approval.

Adding insult to injury, all temps have been banished from Microsoft's extracurricular electronic bulletin boards for any but strictly business purposes. This means they can't join Aquarium/Fish Talk, Romanians at Microsoft, Single Parents, Christian Singles, Gays and Lesbians, Libertarians, MS Liberals, Blacks at Microsoft, Shakespeare at Noon or the amateur theater group. Forget about Bagpipe Players, Cat Lovers or Urdu Literature. Don't even think about Star Trek Subspace, Furniture Repair and Refinishing, Personal Growth Club, Promise Keepers, Espresso Discussion or Tupperware Discussion.


"I don't even think I want to join the Microsoft bicycle club," said one contractor. "But if I do, I'm told I can't. You want to feel you're all part of something, but this separates us out. It's insulting."

Meanwhile, even permanent Microsoft workers wonder who'll get the ax next. Microsoft's official welcome to new "real" employees warns that even they can be fired any time at will. "Hey, I might be gone next week," a computer programmer joked to a friend. "Everyone knows programming isn't a core competency at Microsoft. Marketing is the only core competency here. By next year, the marketers just might have this whole place to themselves."

Paul Rogat Loeb

Paul Loeb is the author of "Generation at the Crossroads: Apathy and Action on the American Campus" (Rutgers University Press) and the forthcoming "Soul of a Citizen"(St. Martin's Press).

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