Microsoft asks redundant workers for a refund

Microsoft has made an accounting blunder and is now in the embarrassing position of asking laid off workers for a refund.

The web site TechCrunch has managed to get hold of a copy of a letter sent out by the firm to a number of laid off workers, and has printed it in full. The letter was sent out to a selection of workers from a recently announced 1,400 redundancies.

"This letter is to inform you that an inadvertent administrative error occurred that resulted in an overpayment in severance pay by Microsoft," it reads. "We ask that you repay the overpayment and sincerely apologize for any inconvenience to you."

Microsoft has confirmed that the letter is real, but said that it was a private matter between itself and the over-compensated workers. How many workers were over-compensated is unknown, and Microsoft is unlikely to release this information, however TechCrunch has confirmed that it is more than one.

Lay offs are common in the current economic climate, but this is something of an embarrassment to Microsoft, with some calling its decision to ask ex-workers for money back a PR blunder.

Elsewhere, Jens Butler, an analyst with Ovum, said that firms should consider alternatives to job losses when tackling recession, because otherwise they will not be in a good position to benefit with the financial tide turns.

"During a downturn, the main emotion driving the chief executive is fear of the unknown of things such as the length of the downturn, and the impact on revenues and the client base," she wrote. "As employment costs can account for up to two-thirds of business costs, they are an obvious target and, given the pressures on quoted firms around quarterly reporting, many chief executives resort to the apparent quick medicine' of headcount reduction."

"But is it economically and strategically prudent to release resources at an average cost of around ten months' salary, as well as the additional indirect costs involved, such as loss of IP, the impact on morale and the costs of re-hiring staff when the economy returns to growth?" she added.

Click here to see our list of tech job cuts so far.