Economic Times of India March 4, 2009, 8:47AM EST

Microsoft's Reply to Sen. Grassley on H-1B Visas

Microsoft tells Senator Charles Grassley how it's dealing with the economic crisis and how its plans will affect U.S. and foreign workers

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Microsoft is not sheltered from the unprecedented crisis battering the global economy. In response to challenges we are confronting in markets around the world, we announced last month that we would cut jobs and reduce our overall employment level for the first time. This was a difficult decision, and it was not one we made lightly.

But the long-term health of the company, like the financial fate of the country as a whole, requires prompt and decisive action to adapt to the changed economic reality. On January 22, Sen. Charles Grassley wrote to us asking for more information, particularly about how our plans would affect US workers and non-US citizens working for Microsoft. Here is the text of our response:

March 3, 2009

The Honorable Charles E. Grassley
United States Senator
135 Hart Senate Office Building
Washington, D.C. 20510-1501

Dear Senator Grassley,

Thank you for your letter of January 22, 2009. Steve Ballmer asked me to respond on the company's behalf.

Your letter expressed concern about Microsoft's recently announced lay-offs and asked us to provide you with information about them. I have included that information below, but first I'd like to provide a bit of context.

Since the company's founding in 1975, Microsoft's consistent growth has enabled us to increase employment every year. In the last three fiscal years, for example, our employment in the United States increased by 40 percent. Today we have more than 90,000 employees worldwide and over half of them are in the United States. The vast majority of these U.S. jobs are filled by American citizens.

Because of our partner-based business model, our impact on employment is even larger than these numbers indicate. For every dollar that Microsoft earns in the United States, our business partners earn $6. This creates many additional jobs. One recent study found that 4.2 million people in the United States are working in jobs that are the result of Microsoft's business model (IDC IT Economic Impact and Microsoft Country Footprint: United States, October 2007. The figure includes individuals who work at IT companies and IT professionals who create, sell, or distribute products that run on Microsoft platforms).

This year, in response to the economic crisis, Microsoft is reducing its employment level for the first time. This was a difficult decision and it was not one we made lightly. We are deeply committed to our employees and we place the highest value on the contributions they make to the company's success. We understand the impact that each layoff can have on an employee and his or her family. Nonetheless, we concluded that the long-term competitiveness of the company, like the country as a whole, requires prompt and decisive action to adapt to the changed economic reality.

We announced in January that the company would eliminate up to 5,000 jobs over 18 months. It's important to note that we also expect to create 2,000 to 3,000 new jobs during this same timeframe, as we continue to invest in innovation. As a result, the total net impact on our employment will be a decline of about 2,000 to 3,000 jobs, not 5,000.

Microsoft employees whose positions are eliminated may apply for the new jobs that are being created. In addition, like any employer, we will continue to see some ongoing voluntary attrition as employees retire, accept jobs elsewhere, or for other reasons end their employment. Often, these positions are filled by current employees, but the company will also need to continue to fill these vacancies by hiring new employees, including both U.S. workers and a smaller number of visa holders.

You asked about the kinds of jobs that will be eliminated and how many employees will be affected in each area.

Because the job reduction decisions will be made over 18 months, we do not yet know all of the specific jobs that will be eliminated. We do know, however, that the 5,000 positions that will be eliminated will include jobs in marketing, sales, finance, Legal and Corporate Affairs, HR, R&D, and IT. In addition to the 5,000 figure, our workforce in support, consulting, operations, billing, and manufacturing will continue to change in direct response to customer needs.