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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 10:28 AM

Microsoft responds to Sen. Grassley on layoffs, H-1Bs

Posted by Benjamin J. Romano

Microsoft this morning posted a letter to U.S. Sen. Chuck Grassley, R-Iowa, responding to his Jan. 23 request for information on the company's work force and plans in light of its first major layoffs. The lengthy letter, signed by General Counsel Brad Smith, repeats much of what Microsoft has said publicly -- layoffs will be centered in the Puget Sound, both U.S. citizens and immigrants are among those losing jobs -- but also includes several new nuggets. Read the whole letter here. I'll post a summary in a few minutes. [Update, 5:06 p.m.: Fixing link to the full letter and noting Grassley's response, in a statement to various news outlets: "I'm still left without much information about how Microsoft is ensuring American workers are being protected or specifics of its H-1B hiring practices. I'm interested in learning more details."]

Update, 10:47 a.m.: Microsoft plans to keep proportion of H-1Bs stable after layoffs. Read on for more details.

Smith didn't provide all of the hard figures Grassley had requested. Grassley had asked CEO Steve Ballmer for an accounting of how many of the jobs to be eliminated are held by H-1B or other work visa program employees; how many are held by Americans and, of those positions, how many similar positions held by foreign guest workers are being retained; and how many H-1B or other work visa program workers Microsoft will retain when the layoff is complete.

Smith indicated that Microsoft does "not expect to see a significant change in the proportion of H-1B employees in our workforce following the job reductions." More on H-1Bs below.

Smith noted that while the company is laying off up to 5,000, it's also planning to hire 2,000 to 3,000 in the next year and a half. It also expects to have positions come open through attrition.

"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," Smith wrote.

Smith said Microsoft does not yet know the specific jobs that will be cut, because the layoffs will continue over an 18-month period. He added, "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."

The layoffs will also hit outside the U.S.; however, Microsoft said earlier that few if any jobs were immediately cut in India or China. Smith also emphasized that more than two-thirds of the company's planned $9 billion research and development budget will be spent in the U.S.


Smith did not provide Grassley with precise figures about Microsoft's use of H-1Bs. In general, he wrote, "Workers on H-1B visas and other temporary work visas make up only a small percentage of our overall workforce" -- fewer than 15 percent are H-1Bs, he added later -- "but they were also among the employees impacted by the reductions announced in January."

Smith added "we take care to make all employment decisions -- including the termination of employment for any individual -- in a manner that complies with Title VII of the Civil Rights Act of 1964. In addition, we do not base compensation decisions in the U.S. on an employee's citizenship."

Smith indicated Microsoft plans to continue hiring workers on H-1B visas. "Although they are a small percentage of our workforce, H-1B workers have long made crucial contributions to Microsoft's innovation successes and to our ability to help create jobs in this country. We are confident this will continue to be true in the future."

He added that while most of the company's core technology recruiting efforts focus on U.S. colleges, the people earning advanced technology degrees are increasingly "temporary residents".

"[T]echnology and engineering positions account for about 90 percent of Microsoft's H-1B workforce," Smith continued. "Many of these H-1B employees have been seeking permanent resident status for many years and would no longer be dependent on their H-1B visas but for multi-year delays in the green card process."

He pointed out the shortcomings of the H-1B program as well and was adamant that Microsoft is using the program as it is intended:

"I want to underscore that we are rigorous in our compliance with the requirements of the H-1B program. We are familiar with published reports about abuse by some employers in the H-1B visa category. We believe that the H-1B fraud issue is important and needs to be addressed. We recognize that every H-1B employer has an obligation to ensure that the program's rules are followed. We support H-1B reform efforts to ensure that users of the program follow both the spirit and the letter of the law.

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