Analysis and discussion of issues that impact business

Everybody's favorite software punching bag, Microsoft, has notified companies that supply them with contract workers, to tell about a thousand of them to take a week off work without pay. An AP story as reported by MSNBC.

Microsoft spokesman Lou Gellos said Monday that Microsoft told vendors who supply the contractors that about 1,000 workers globally would not be needed this week. The vendors, whose workers do software development for Microsoft, also were told to schedule two other days off, Gellos said.

Is this a good thing or a bad thing?

Obviously, this is not good news for the thousand or so workers.

Bill Wilson, a software engineer who has worked as a contractor at Microsoft for about six months, said he was surprised when he found out last week that he wouldn’t be working — or getting paid — for seven working days beginning Monday. Wilson, 57, said he might have made different financial plans if he’d known about the time off. But he was more concerned about some of his colleagues with younger kids and lower salaries.

Now, I've worked as an outside contractor, and in many cases, because you're usually needed on a short-term, and sometimes emergency basis, the pay is often higher than what a salaried employee would get. That can sometimes offset the lack of benefits available.

Gellos said this was one of the first times that Microsoft has scheduled a short period of time off for its contractors. He said the company made the decision because it was running over budget in some areas as it headed toward the end of its fiscal year on June 30.

So, from a fiscal standpoint, Microsoft is just trying to keep expenses under control. Legitimate for a company to do. But is this a trend we should be concerned about?

But Plano, Texas-based EDS Corp. confirmed that it contracted fewer than 25 of the workers. Companies often ask EDS to make changes like this, and noted that such flexibility is one reason they use contract workers, spokesman Travis Jacobson said.

“To us, this is just business as usual,” he said.

As one who has hired contract workers on occasion, and been one myself, this is just part of the natural ebb and flow of the business cycle. I wouldn't get too worried about it. Unless, of course, you're one of the 1,000.