No matter how you slice it or dice it, there's no way Microsoft comes out smelling like a rose on this one.
As the company was handing out pink slips to some 1,400 employees last month, the accounting department apparently was using fingers and toes to calculate severance packages. It turns out that the company overpaid these former workers and, now that the error has been discovered, Microsoft wants its money back.
The copy of the letter floating around the Internet has the names and dollar amounts blacked out so it's hard to say if the payback amount is $10, $100, $1,000 or more. And we also don't know if all 1,400 laid-off workers were affected. But, just for laughs, let's do some very simple layman's math:
If it's a $10 overpayment, then the overpayment comes to $14,000. At $100, it totals $140,000 and at $1,000, we come up with a whopping $1.4 million in overpayments. On the other side of that equation, there's Microsoft's cash-in-the-bank: roughly $20.7 billion at the end of the last quarter. Let's just say the company takes the $1.4 million loss out of their cash-on-hand. (I know it's likely more complicated than that, but for this example, let's assume that's how it happens.) That leaves the company with roughly $20,698,600,000. Rounded up, that leaves the company with... Hey, what do you know? It's still $20.7 billion.
Again, we don't know the amounts at play here. But given the negative publicity - did anyone really think that this wouldn't end up on the Internet? - wouldn't it have been easier to just take the write-off and avoid dumping even more salt into the wounds of the laid-off workers? And what if the company has to take legal action to recover those funds? The lawyers will surely get paid, right?
Just wondering: is the head of accounting coughing up any of his paycheck to cover this flub?