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In the Media

article imageMicrosoft lets former employees keep cash

article:267896:9::0
By Chris V. Thangham
Feb 24, 2009 in Business
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Thanks to a recent accounting error, a number of recently laid-off Microsoft employees were accidentally overpaid in their severance packages. The company faced a PR disaster when it asked for the money back. Microsoft now says they can keep it.
Last Saturday, the website TechCrunch published a letter Microsoft sent to one of its fired employees indicating the company wanted money back from an accounting error that saw a number of former employees overpaid in their severance packages. Some employees were also reportedly underpaid.
After news broke, Microsoft faced a barrage of criticism around the world. To avoid further criticism, Microsoft now says it is not looking to get paid back by former employees.
The former employee who provided the tip to TechCrunch talked about the Microsoft notice, saying:
"Right away I was angry because when I got my severance check, I immediately created a budget to stretch this out as long as possible. I know we’re in a recession now and I don’t know how long I’ll be unemployed. And now here comes this letter totally destroying the budget and on top of that, there’s no detailed information on how the error occurred, no details breaking down the severance pay."
Microsoft later admitted to CNET that it did send the letter but didnt’ reveal how much money they want back, or to how many employees were overpaid. Microsoft blamed its accounting software for sending the excess money in employees’ severance package.
Many websites and news outlet called the incident a huge public relations misstep, and warned it could hurt Microsoft in the long run if it continues to try and get the money back.
After mulling it over, Microsoft announced today it will allow dismissed employees to keep the excess amount, which averages around $4,500 USD, according to TechCrunch. Also, Microsoft found some of them were under-compensated and that they will be paid in full immediately.
Microsoft sent the following message to CNET:
"Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. This was a mistake on our part. We should have handled this situation in a more thoughtful manner. We are reaching out to those impacted to relay that we will not seek any payment from those individuals."
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