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Microsoft backtracks on severance issue

Redmond says laid-off workers who were accidentally paid too much will be able to keep the excess.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
2 min read

This story was updated at 3:45 p.m. PST with an official statement from Microsoft.

Amid a wave of criticism, Microsoft is backtracking on a decision to require laid off workers to pay back money that the software maker said was in excess of its planned severance, CNET News has learned.

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Over the weekend, Microsoft confirmed it had overpaid severance to some workers and underpaid others. At the time, the company did not say how much money was involved, but sent the workers who were overpaid a letter saying they would be required to pay back the money in excess of the severance they were due.

On Monday, Microsoft human resources chief Lisa Brummel said the company was reversing course.

"I thought it didn't make sense for us to continue on the path we were on," she told CNET News. Twenty-five workers were overpaid and about 20 underpaid, Microsoft said.

Brummel said she has spoken or left messages to most of those affected.

Brummel said those overpaid received, on average, about $4,000 or $5,000 in extra pay.

"I have called now 22 out of the 25 impacted employees, only because I haven't had time to get to the three but I will after we hang up," Brummel said.

In general, Brummel said it makes sense for companies to recover money if it makes an accounting error, but she acknowledged the situation was an extraordinary one. Brummel said the company actually overpaid her at one point during her long tenure.

"It actually happened to me and I wrote the company a check," she said. "It may have happened to others."

Later on Monday Microsoft issued the following statement about the matter:

Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. 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.

Microsoft also said that the company is immediately reimbursing the underpaid employees.