Microsoft contract workers protest pay cuts

A busy Overlake street corner became a temporary union hall for about two dozen Microsoft contract workers who gathered Monday night to protest the pay cuts they face as the company seeks to trim its labor costs.

Last week, the third-party employment agencies that place them in temporary jobs at Microsoft agreed to lower the rate they charge the software giant by 10 percent. Many of the agencies are passing a similar cut to the employees.

The workers, gathered on a corner of Microsoft's sprawling Redmond campus, tried on campaign slogans — "I'm a PC, pay cut," said one man.

They lamented the cuts in light of Microsoft's $4 billion profit last quarter, as well as the amount the contract agencies receive from Microsoft over and above what the workers are paid.

"Everybody understands that we're in awful economic times and things are horrible," said a temp worker who asked that his name not be used for fear of losing his job.

"But for some people, 10 percent is the difference between being able to pay rent and not. A leasing company won't accept, 'I'm sorry, but I'm 10 percent short.' "

The event's organizer was Phil Palios, 23, a Redmond native on his third Microsoft contract through Volt, one of the largest agencies that supply workers to the software giant.

Palios sent an Outlook meeting request to some 2,000 temporary employees to publicize what he called a "peaceful protest," but described it in an interview earlier Monday as a way to open communication among thousands of Microsoft temps facing pay cuts.

Microsoft spokesman Lou Gellos had no comment.

The company announced its first companywide layoffs in January, with plans to cut a net 2,000 to 3,000 full-time jobs — part of a broader campaign to trim expenses in a shrinking economy.

Palios said he was aware he put his job in jeopardy by speaking out, but he had already decided not to accept the pay cut, which may cost him future contracts.

Since he started contracting for Microsoft in 2006, he said he has felt something about the setup "wasn't right."

A friend involved with organized labor at UPS inspired him to speak out.

"I wanted to at least act and make my voice heard and try to unite the workers," Palios said. " ... If they just work together, they can have a lot more power and open up communication channels with the company."

Temporary workers are told not to discuss their employment situation with full-time Microsoft employees.

The president of WashTech, the nationally known tech-workers union — formed in 1998 to represent Microsoft contractors who came to be known as "permatemps" — saw little hope for formally organizing today's temp workers.

"It is intriguing as a private action," Les French, WashTech president, said of the planned protest when told about it Monday afternoon.

But organizing workers at dozens of temporary agencies, in a range of job classifications, would be a "nightmare" under current employment law, he said.

Late Monday, after attending the gathering, WashTech spokeswoman Priyanka Joshi said the group would explore ways to help the workers. "WashTech is considering creative strategies with the Communications Workers of America to unionize the temp workers of Microsoft," she said.

Palios, in publicizing the protest, said he found roughly 4,000 e-mail addresses just in the Redmond area for so-called "a-" or agency temporary workers, usually paid hourly.

That's distinct from another large group of vendors who do project work for Microsoft.

Contract workers have seen their wages pushed down through other means in recent years, French said.

But the 10 percent bill-rate cut — the amount the agencies are paid by Microsoft to provide contract employees — "is kind of a first," he said.

Many agencies, such as Volt, are mandating their employees take a 10 percent rate cut in wages as a result.

"This is mandatory in order to continue your assignment at Microsoft and to respond to this economic environment," Volt said in an e-mail to employees Friday.

The employees have until the close of business today to accept the cut, which takes effect March 16.

Those who accept will have "a formal written amendment" added to their employment agreements.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Information in this article, originally published March 2, 2009, was corrected the same day. A previous version of this story incorrectly stated that Microsoft announced its first companywide layoffs in January, with plans to cut a net 3,600 full-time jobs. A more accurate estimate is 2,000 to 3,000 full-time jobs.