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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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March 3, 2009 6:01 PM

Microsoft vendors and contingent workers total more than 79,000, on top of direct employees

Posted by Benjamin J. Romano

It's widely known that Microsoft has a large contingent work force in addition to its 96,000 direct, regular employees worldwide. But the company has never publicly quantified these workers, who typically work through third-party firms and do everything from mow the lawns to write software.

According to numbers reviewed by The Seattle Times, Microsoft has roughly 70,700 vendors, as well as 8,600 "other" workers worldwide. The "other" category includes mostly agency temps -- the so-called "a-" workers -- but also visiting researchers and interns.

The numbers come from HeadTrax, an internal application used to track human resources. It lists a total head count of more than 175,700 people who could be broadly described as earning some portion of their living through work for Microsoft. The figure does not appear to include the impact of 1,400 layoffs announced in January and set to take effect later this month as part of an 18-month plan to cut a net 2,000 to 3,000 full-time jobs.

Microsoft spokesman Lou Gellos said the numbers are "within the ballpark," but added that HeadTrax is essentially a "running barometer" for the company to keep a handle on things. He added that the vendor number "varies widely depending upon what's going on at any given time."

Vendors perform a range of functions of varying durations for the company through outside service providers. A landscaping company, for example, may get badges so that a crew of workers can come on campus to mow lawns. But even though the crew is included in the count of vendors, they might not work at Microsoft every day.

This can cause the vendor figure to appear artificially high, Gellos said.

Other functions performed by contingent staff, both vendors and agency temps, include staffing reception desks, driving the company's shuttles and Connector buses, writing technical documentation, providing security, moving offices, writing and testing software code, lending specific expertise to major projects and more.

The HeadTrax information did not indicate where the employees are located. Microsoft does report its local regular, work force. At the end of January it had about 41,555 in the Puget Sound region, about 43 percent of the total at that point.

Matt Rosoff, analyst with Kirkland-based independent research firm Directions on Microsoft, said the number of contract workers is not surprising, but is interesting to see quantified.

"We had always heard that Microsoft has about as many contract employees as it does full-time employees, so 70,000 [vendors] seems very reasonable to me," Rosoff said.

A segment of the contingent staff has been in the spotlight in recent days after Microsoft lowered by 10 percent the amount it pays U.S. third-party temporary agencies that place these workers in assignments at the company. Many of the temp agencies are passing a similar cut on to the contract employees. (The 10 percent cut, part of a broader Microsoft cost-cutting effort, has so far affected only the so-called "a-" agency temp workers, of whom there were recently about 7,200 worldwide.)

Rosoff said the total global head count figure, 175,700, may still miss some people at other companies that do most of their work for Microsoft.

"In the Seattle area, there are plenty of small development companies who are mostly dependent on Microsoft outsourcing work to them," Rosoff said. "Say an internal product group wants to build a SharePoint site and nobody has time to do it. That's the kind of thing they might outsource."

Microsoft's use of contingent workers matches the broader trend in the technology industry, said Eric Gregg, a managing partner at the Inavero Institute, a Portland firm that provides research on and for the staffing industry.

"It is no longer the case that companies view temporary and contract strategy as their 'contingent' workforce, but rather their flexible workforce," Gregg said via e-mail. "... In the technology space, this reliance on temporary and contract labor is even more pronounced than in many of the other sectors."

The HeadTrax numbers reveal that Microsoft is vying with Boeing in terms of global work force. On Feb. 28, the aerospace giant had 161,594 employees including subsidiaries and long-term contractors. It's difficult to make a direct comparison, however, because of the caveats for Microsoft's vendor work force mentioned above and different methodologies used by each company to count their various types of workers.

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