Microsoft cuts temp worker rates 10%

SEATTLE -- Microsoft is slashing overtime, hours and pay for U.S. temporary workers as part of an overall push to curb expenses during the recession.

Microsoft will cut what it pays the staffing agencies by 10% for current projects and won't raise the rate it pays for temporary workers who return after a mandatory annual 100-day break. The company also plans to reduce overtime and the total number of hours clocked by temporary workers. In a statement, the company said it talked with some employment agencies before making the decision.

The move, first reported by the Seattle Post-Intelligencer, comes a month after the software maker resorted to its first mass layoffs and said it would trim travel costs, freeze wages and scale back expansion plans for its Redmond, Washington, headquarters.

Microsoft does not disclose how many contract workers it uses, and analyst estimates vary. Sid Parakh, an analyst for McAdams Wright Ragen, said he believes the number is somewhere between 40,000 and 60,000 worldwide.