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Microsoft payroll mistake - 'Perhaps they used Excel?'

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24th Feb 2009
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After a storm of negative publicity, Microsoft backed down from asking former employees to give back a portion of their redundancy pay-offs. John Stokdyk reports.

The incident follows January's job cuts, the first in Microsoft's history. Some 1,400 employees were laid off immediately with 3,600 more redundancies planned to follow in the next 18 months.

But last week, letters sent from the company's payroll department in Fargo, North Dakota, were posted online by TechCrunch explaining, "an inadvertent error occurred that resulted in an overpayment of severance pay by Microsoft", and asking former employees for the excess back.

A Microsoft spokesman told AccountingWEB that 25 former Microsoft employees had received the letters.

"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," the company said.

Fargo is the north American HQ of the Microsoft Dynamics business applications division that is also responsible for creating the company's commercial payroll software. As discussed in more detail on our sister site HR Zone, getting something so basic wrong doesn't just call the company's personnel procedures into question, it also asks questions about the software itself.

As Michael Santo of Hothardware.com quipped, "Perhaps Microsoft used Excel when they calculated the severance packages."

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