Microsoft cuts benefits to save $80M

Thanks OrangeSoul. Microsoft Corp. (MSFT) is reducing prescription drug benefits and employee stock discounts to save at least $80 million a year, workers have been told. The cuts will "better align our benefits with those of our competition while still keeping us ahead of the market average," Kenneth A. DiPietro, vice president of human resources, wrote in an e-mail to employees Tuesday. In September, Microsoft withdrew a stock option plan that once made a number of employees millionaires but in recent years yielded little because of stagnant share prices. Since then, Microsoft has given employees smaller amounts of stock outright.

The company also has imposed other cost-cutting measures, including reductions in travel and entertainment spending, to sustain profits in a weaker technology market. Still untouched are such benefits as free gym memberships, free beverages on the job, well-stocked cafeterias and flexible time off. Microsoft also has more than $50 billion in cash reserves.

"Microsoft has an incredibly generous benefits package," said Cecily Hall , Microsoft's director of benefits in the United States . "Employees recognize that, and I think that these changes offer a lot of choice and flexibility and therefore should not impact overall morale."

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News source: CNN

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