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Microsoft contractors to suffer 10% rate cut

Published on Feb 26, 2009 | | Contract Rate Checker

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Microsoft's US contractors are the latest to feel the pinch as they have their contract rates cut by 10%. The number of hours worked by contract workers is also to be cut.

In order to cut costs, the software giant is cutting the amount it pays recruitment agencies by 10% for all current projects. The rate is pays for future projects is expected to be cut by 15%.

It would appear that it is up to the agencies to decide whether to pass on the cut to its contractors, or absorb any of the financial hit themselves. Past experience by the Contract Eye team would suggest the former!

According to SeattlePi.com, where the rate cut news first broke, one recruitment agency has already passed on the cut to its contractors.

Although it is unknown how many temporary workers the company uses worldwide, some sources suggest around the 50,000 mark - a fair percentage of this number will account for professional IT contractors.

The news comes as worldwide demand for Microsoft's products is slowing due to the economic downturn.

In January, the company announced that it is to lay off 5,000 permanent staff members over the next 18 months.