Bonum Certa Men Certa

Neo-liberalism in Action: Microsoft Outsourcing the Work to Temporary Staff Without Any Rights or Leverage by Dissent



Reprinted with permission from Mitchel Lewis

Microsoft ICE



Summary: Got to pay the bills, got to obey orders -- that's the kind of motto Microsoft wants all employees to adopt (leaving morality at the door); that's akin to neo-liberalism, which is defined as a modified form of liberalism tending to favour free-market capitalism (deregulation)

Roughly half of the labor force of most major technology companies consist of contingent staff; vendors, temps, contractors, etc. Despite the asterisk next to my name and an orange badge instead of a blue badge, it was still a highlight of my engineering career when I became a vendor at Microsoft. But the celebrations came to a crashing halt after being reminded by a full-time employee (FTE) that I was not paid to think, only to do as I was told as a vendor. Although I didn’t know much about management at the time, I knew that no acceptable realm of management advised the demoralization of ambitious new hires and this sort of reception perplexed me.



If this was truly the case, then Microsoft could have easily replaced my efforts with unthinking algorithms and saved the $70/hour that they were paying my vendor company for my time; not that I saw all of that. They could have hired any geek off the street to do as they’re told instead of an expert in their field that I was. Whether he liked me or not, I was hired because I knew significantly more about Exchange, 3rd party messaging technologies, and the Microsoft stack than the boomer trying to belittle me, so this sort of treatment just didn’t add up as far as I was concerned.



To be fair, my initial experience could have easily been a simple case of a bully with low self-esteem trying to elevate themselves by making others feel inferior. But vendors compare notes and this experience was consistent with many contingent staff throughout Microsoft and other tech giants. This treatment seemed to be the status quo. Whether or not it was the case and even after becoming an FTE myself, this dynamic still compelled me to question the true role of vendors throughout tech for years to come.



Initially and like many others, I viewed my role at the company as a vendor functioning simply as a cost-effective trial run and a foot in the door as many temp jobs are. As far as I was aware, this was typical of temporary staffing and little else. As such, I interpreted this sort of treatment as a challenge to see how I handled adversity and opted to showcase my worthwhile letting my actions necessitate a full-time offer; a trial by fire if you will. So I worked like a velocidonkey with a blue badge for a carrot dangled in front of me in an effort to change my employment status.



Although this treatment didn’t demoralize or demotivate me in the slightest, countless others took this second-class treatment to heart. While I didn’t have much to lose and could take more risks, plenty of others had more riding on their paychecks such as their families or other dependencies. So they opted to endure the abuse, do as they were told, and maintained a low profile so as to avoid confrontations with FTEs that could end their career there in an instant; almost as if they were indentured servants or slaves.



This caste system of sorts had a crippling effect on their performance in turn. It’s difficult to be at your best when you’re perpetually worried about losing your job with few protections or recourse if you are terminated and this is especially true in a grind house of an industry like big tech. Less stress equates to more output. Because of this, I couldn’t view such a reception as a futile attempt at reverse psychology or a managerial tactic meant to identify the best candidates out of their labor force.



Given how consistent this experience was with other vendors inside and outside of my org, I eventually concluded that they not only needed vendors to think to do their job, especially since they expected our work to be of the same caliber of any FTE, but that they needed vendors to think less of themselves than that of a full-time employee as well. It became obvious that demoralizing and oppressing half of their labor force into a techno-caste while distributing them throughout countless salary sucking vendor companies served an actual purpose.



Since most of the actions of giant firms such as Microsoft are intentioned and calculated, why they did this and what purpose this dynamic served were the real questions on the top of my mind. Obviously, it was done in the pursuit of profit, but how exactly this dynamic translated into profit was still a mystery to me. One thing was for certain, it wasn’t done in the name of empowerment.



While many would like to think that their dependence on vendors was an administrative cost-savings measure as I did at first, vendors aren’t short-term staffing solutions there. Many vendors have worked in the same permatemp capacity for years. Because of this, Microsoft didn’t seem to achieve much in the realm of cost-savings from this dynamic because they paid a perpetual premium for our services designed to be short-term. Forcing vendors to take a 6 month break after an 18-month contract didn’t exactly increase cost-savings either and plenty of vendors received exemptions from this mandate.



Sure, their reliance on contingent staff limited the administrative overhead necessary to facilitate benefits for everyone and saved them from having to provide elaborate offices for us as they did for many FTEs. They didn’t have to worry about severance, unemployment insurance, FMLA, or even the health of their vendors either. But they also didn’t have to pay their full-time employees overtime like they often do with their contingent staff and the cost disparity between a vendor and an FTE was minimal and there were countless examples of vendors netting more than their FTE peers after the middlemen got their cut which ranged between 30–50%.



Vendor or FTE, there was a slow ramp-up process that could take months for them to get up to speed while losing competent vendors inflicted as much or more operational pain as losing FTEs. As such, the operational losses from turnover and attrition were mostly a wash like the supposed administrative savings. Ironically, when I eventually left my vendor role for a full-time offer, I was still retained on a part-time basis for months afterward in order to support and handoff the project that I was leaving behind.



Maintaining relationships and contracts with 100+ vendor companies wasn’t burden-free from an administrative perspective either. It may have solved one problem but it created another. As is the case with most aspects of life, increasing the middlemen in your bottom line seldom results in cost reductions. Even the most inept engineer at Microsoft can confirm that complexity inflates overhead costs. So direct cost-savings from such tedious efforts was a very hard sell in my opinion.



With all of these idiosyncrasies canceling out the stereotypical benefits associated with contingent staffing, I was still left wondering how Microsoft could benefit from distributing half of its labor force through 100+ vendor companies. After becoming an FTE, I was still left to question why they needed so many vendors, vendor companies, and this second class treatment instead of hiring them outright or at least treating them as equals. It goes without saying, but we as FTEs weren’t told to oppress and demoralize vendors or treat them as second class citizens, we just weren’t told not to nor were we disciplined if we had; at least not at my pay grade. But it still wasn’t made apparent why we maintained such an obvious caste system or relied on so many contingent staffing companies in the first place.



As one gains shares in a company though, how they evaluate public companies changes and some of the lesser understood advantages to their vendor dynamic became more apparent as time went on. One distinct advantage of this vendor dynamic could be found when looking at how publicly traded companies are evaluated by analysts. Key performance indicators (KPIs) of how efficient a company is can be found in their revenue per employee or turnover metrics among others which vendors are excluded from entirely. In doing this, they render the company much more efficient and viable in the eyes of analysts by effectively hiding half of their labor force.



Although many tech companies have a near 1:1 ratio between their employees and vendors, Google, Facebook, Amazon, and IBM included, they essentially double their efficiency on paper by burying the payroll of their vendors within various operational costs instead of reporting it like they do with their FTEs. At the time at Microsoft, it was the difference between showcasing $800,000/employee and $400,000/employee which is significant. While this may seem minuscule to the untrained eye, this is huge for analysts.



But when added to the other traditional justifications of contingent staffing, such an approach didn’t justify working with so many different firms that didn’t specialize in anything besides putting asses in seats, let alone the caste system and unnecessary complexity that this dynamic seemed to foster. They could have easily accomplished this with a handful of vendor firms, but clearly needed more for some reason, hence why they had more. Jumping through all of these hoops and scraping the barrel so hard for such small ends still didn’t make complete sense.



As one might do when considering abuse and pay disparity though, I eventually began to wonder why vendors wouldn’t unionize in the face of such treatment. In turn, this line of inquiry inadvertently led me to another lesser-known but no less distinct advantage to this sort of labor distribution. When huge corporations are faced with unionization or the labor strikes that come with them, it becomes a simple matter of divide and conquer and this approach could serve as a preemptive strike against them. Corporations tend to despise the mere notion of unionization and this approach severely limited the ability of their entire labor force to bargain collectively, let alone go on strike, by driving wedges between them.



Just as you aren’t supposed to put all your eggs in one basket, they didn’t retain their workforce through a single company. While unionizing one company is incredibly difficult, unionizing 100+ companies borders on the impossible; especially in unison. With such a dynamic at play, Microsoft’s labor force perpetually scabbed itself over and had little to no ability to function as one. Even if an entire vendor company unionized and went on strike, Microsoft’s ability to maintain productivity remained intact, albeit degraded. In turn, this degraded the ability of vendors to bargain collectively and mitigated their leverage should they go on strike.



If one vendor company unionized, it’s of little consequence to Microsoft because the vendor company had to eat the added costs associated with unionization. Without specialty and while simply putting asses in seats, these vendor companies could easily be replaced by another non-union shop. And when it eventually became time for a would-be union vendor company to renegotiate their contract with Microsoft, they could simply pull that contract and award it to another non-union vendor company that could offer the same services for less. Unionization was effectively a death sentence from the perspective of a contingent staffing firm, not to mention a guarantee that you would probably not get hired into a full-time position for aspiring vendors.



Conversely and if their FTEs unionized and went on strike, Microsoft could depend on their vendors to function as scabs and work as a skeleton crew to maintain some semblance of productivity. It wouldn’t have been perfect, but vendors do the lion’s share of the labor at Microsoft which enabled them to maintain productivity and minimize the impact of a would-be FTE strike just the same. Seemingly, the vendor dynamic that these companies tend to create seemed to function as a shelter from unions and strikes more so than simple payroll or administrative cost-savings.



After all, labor strikes are harmless if their collective absence doesn’t hinder productivity severely and these practices effectively hardened Microsoft against productivity loss resulting from potential strikes. Similar to dodging taxes through various shell companies, it seemed as if Microsoft and the rest of these major tech firms were protecting themselves from unionization and potential strikes by treating vendor companies as organized labor shelters. Despite the obvious ethical misgivings, where many see anything from myopic ignorance and complexity to a bureaucratic nightmare, I finally saw genius in these tactics.



With this in mind, the caste system of contingent staff made much more sense as well. It wasn’t about cost-savings so much as it was about division, oppression, and dominance. From sugar cane and banana farmers to software engineers, the same rules seem to apply to us all.



Even their fervency for H-1B hires made much more sense from this vantage point as these types of had significantly more to lose than a normal vendor while diversifying their labor force even further and commanding a fraction of the salary of FTEs. While FTEs and vendors stood to lose their job, H-1B workers might lose their ability to live in this country if they acted out of line. So many opted to keep a low profile like a vendor.



Even their penchant for hiring white male right-wingers throughout their full-time ranks made much more sense; especially management. Such demographics tend to vehemently oppose unionization while also being much more tolerant of nationalist causes. In turn, this naturally renders their FTEs less likely to dissent and question authority, let alone consider unionization or a strike as a whole. This appeared to be why so many FTEs blindly tow the company line while taking no exception to their cooperation with the likes of ICE, CBP, and the DOD.

In summary and although technology companies are beginning to receive flack for union-busting when employees begin to make a stand, large corporations seldom get the credit that they deserve for the efforts made to prevent such stands from being made. Although this is not the intended purpose of contingent staffing, in excess it can function as an organized labor shelter. The second-class treatment and oppression merely reinforce this dynamic while the administrative cost-savings filched from these practices and how they look to investment analysts are merely the gravy on top.



Disempowered, divided, and demoralized labor forces are far less likely to realize their true worth, let alone unite, stick their necks out, and demand fair treatment regardless of their employment status. FTEs are on the losing end of this dynamic just the same. If major tech companies have to bust unions the good ol’ fashion way, then they’ve failed. Instead, they seem to strategically organize themselves in a manner that enables them to mitigate the discussion of unions from ever happening in the first place.



Recent Techrights' Posts

Not Just Slow News But Also Late News (Julian Assange Landing in Thailand)
Why did AP take so long (nearly a week) to release these?
[Meme] Smart Alec Poettering
How many Microsofters can the Debian Project withstand?
Getting Rid of Microsoft Does Not Go Far Enough
Microsoft already has many problems. One day Microsoft won't exist anymore. But that does not guarantee users' freedom.
Alyssa Rosenzweig's LibrePlanet Talk About Freeing the Apple GPU
Alyssa Rosenzweig is the graphics witch behind the reverse-engineered drivers for the Apple GPU. She previously led Panfrost, the free drivers for Arm Mali GPUs powering devices like the Pinebook Pro. She graduated in 2023 with a Computer Science degree from the University of Toronto and now writes free software full-time.
Links 30/06/2024: LLMs Under Fire and Dictatorship of the Old
Links for the day
[Meme] Walking Outside the Guardrails of the Walled Gardens Built by Monopolies
So-called "advertiser-unfriendly" material was never a problem for Wikileaks
This War Crime Footage, Nothing Political Per Se, Is What They Made Julian Assange Plead Guilty To (War Criminals Not Convicted, Only Those Who Expose Them)
Wikileaks' Julian Assange: Exposing the US Military Crimes
20 Years Passed, Let's Go Even Faster Now
We are hoping to bring more original stories
 
In the First 6 Months of 2024 Thailand Moved to GNU/Linux, Not to Windows Vista 11
maybe users moved from Vista 10 and 11 to GNU/Linux, seeing where Microsoft was heading with forced hardware "upgrades"
Eko K. A. Owen, New Outreach and Communications Coordinator for the FSF
Nice to see many new additions to the FSF's team
Microsoft Has Slaves and Enablers, Not Partners
Obligatory meme too
Windows in Åland Islands: From 100% to Less Than Half
Åland Islands lost the sense of urgency to move to GNU/Linux
Tobias Platen Covered Freedom-To-Play Games in LibrePlanet 2024
Freedom-To-Play games using Taler
[Meme] Opening a 'Webapp' With 'Only' 4 GB of RAM
Until 2020 none of my PCs ever had more than 2 GB of RAM
Destination 'Five Percent'
We reckon GNU/Linux can break the 5% barrier some time by the end of this year, even without counting Chromebooks
A Crisis of Online Journalism
Almost a week ago a journalist was forced to plead guilty for an act of journalism
Germany One of Many Countries Where Microsoft's Bing Lost Market Share After All That LLM Nonsense (Bing Chat and Further Rebrands/Renames)
openai.com traffic plunged 60% last month
Microsoft’s Latest Antitrust Scrutiny
4 new stories
Microsoft Layoffs, Mass Plagiarism, and More
outrage included
GNU/Linux Climbed 0.25% This Month (in statCounter)
Around midday on Tuesday we'll start seeing preliminary data for July
Ilya Gulko Introduces Pollyanna
"Pollyanna is a web framework that makes it easy to create your own libre social space, such as a social network or blog."
'FSFE': Underage Labour, GAFAM Fronting, and Identity Theft to Undermine the FSF's Current Fundraiser
looking to raise funds at the same time as the FSF
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, June 29, 2024
IRC logs for Saturday, June 29, 2024
Links 29/06/2024: Astronauts at Risk, Ukraine Updates
Links for the day
Fedora and Red Hat Leftovers
mostly redhat.com
Microsoft is Now Googlebombing or Spamming 'Open Source' and 'Linux' to Promote Proprietary Surveillance, Azure
Notice the title and the image, what's being promoted etc.
Seychelles: GNU/Linux Doing OK
Seychelles cannot be considered poor
Gemini Protocol Isn't Even Remotely "Dead"
"Lupa knows of 505,000 (half a million!) working Gemini URLs at present, up from about 425,000 this time last year"
About 10 New Free Software Foundation (FSF) Members Per Day
The total changed from 46 to 47 while typing the article
Vista 11 Adoption Unusually Low in Germany and It's Going Down, Not Up
This is not happening only in Germany
Kevin Korte on Computers Being Allowed to Make Decisions Based on Cryptic Algorithms and Proprietary/Secret Data
It uses buzzwords where none are needed
[Meme] Garbage In, Garbage Out (linuxsecurity.com)
It is neither Linux nor security, just chatbot-generated slop
Microsoft-Invaded CISA Spreads Anti-Free Software FUD (as If Proprietary Software Has No Memory Safety Issues), Brittany Day Uses Chatbots to Amplify and Permutate the Microsoft FUD
linuxsecurity.com became an anti-Linux spam site
Microsoft Laying Off Staff in an Act of Retaliation and Union-Busting
retaliatory layoffs at Microsoft
Gemini Links 29/06/2024: Content Drowning in 'Goo' and LLM Slop
Links for the day
Windows Lost Almost 92% Market Share in Egypt
From over 99% to just over 7%
In Ecuador, GNU/Linux Adoption Surged From Under 1% to Over 4% in About 3 Years
Not even counting Chromebooks
LibrePlanet: Cultivating Backups (of Recordings)
an appeal to recover some of these talks
Microsoft/Windows Machines Are Turned Off (or Windows Deleted/Decommissioned) in Web Servers, as the "Market Share" Collapse Continues
Taking full history into account, this is a decrease of over 90% in some cases
Corwin Brust Hosting Freedom: A Behind-the-scenes Tour With the GNU Savannah Hackers
"the "smiling faces" behind it."
Android at 90% or More in Chad
Windows below 2%
David Wilson: Cultivating a Welcoming Free Software Community That Lasts
"a feeling of shared ownership for all users."
Julian Assange Might Continue Wikileaks, But Certainly Not Yet (Recovery Time Needed)
And probably at a symbolic capacity only
Bringing in 12 Santas and Taking 13 Out (Old Interview With Julian Assange)
Julian Assange's life inside the Ecuadorian embassy
Neil Plotnick on GNU/Linux in the High School Classroom
uploaded to the LibrePlanet instance of MediaGoblin
Asia Appears to be Fastest to Adopt GNU/Linux
the home of a considerable majority of the world's population
Alexandre Oliva's LibrePlanet 2024 Talk About "Software Enshittification"
in spite of technical difficulties encountered while recording
What They Used to Do With Mono They Now Do With Systemd (Lower and Deeper Down Than Userspace)
Now we have a project started primarily by Red Hat (and managed by Microsoft GitHub, which is proprietary) being managed by Microsoft and primarily serving Microsoft and IBM
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, June 28, 2024
IRC logs for Friday, June 28, 2024
Links 28/06/2024: Kangaroo Courts and Patents Spam, EFF Still Fighting for CPC's TikTok (a Digital Weapon)
Links for the day
Links 28/06/2024: Overton window and Polarization
Links for the day
[Meme] In 50 Years...
Microsoft's Vista 11 will take 50 years to be fully adopted
Only About 1 in 8 Russian Windows Users is Using Vista 11
it looks like over the past 12 months Vista 11 hardly grew and it remains very low at around 12% of Windows usage in Russia
Links 28/06/2024: More Attacks on the Press, More Censorship in Russia
Links for the day
Gemini Links 28/06/2024: Christmas Prematurely, Self-hosting
Links for the day
IBM: So Long, Suckers. Your Free OS is Now Proprietary. Pay IBM or Else.
almost exactly a year after turning RHEL into proprietary software
Vista 11 is Doomed and Despite Lack of Adoption Microsoft Already Speaks of Vapourware ("12")
"Microsoft has pulled a Windows 11 update after users reported boot loops and startup failures."
ChromeOS Reaches Highest Share in Years at the World's Most Populous Nation, Windows Now at All-Time Low of 13%
We're talking about India today
[Video] "It Is Incredible That Julian Assange Survives"
There was a positive and mutual relationship between Wikileaks and Dr Jill Stein
Never Assume That Because the Law Exists the Powerful Will Follow the Law
Who's going to hold them accountable now?
Nearly a Month Has Passed and Nobody at the Debian Project Even Attempted to Explain What Seems Like Back-dooring of Debian (and Hundreds of Distros That Are Debian-Derived)
I can cynically guess that only matters when a user with a Chinese name does it
[Video] Julian Assange Explains Wikileaks' Logistics
predating indefinite detention
IBM Was Never the "Good Guy", Just a Self-Serving and Opportunistic Money- and Power-Hungry Monopolist, Living Off of Taxpayers' Money (Government Contracts)
The Nazi Party of Germany was its second-biggest client at one point and now it's looking to profit from the work of slaves
"I Hated Working at IBM. They Were the Most Unfriendly People."
Don't forget what Watson the son did to a poor woman on a plane
State of the News (and Depletion of Journalism Online, Not Just Offline)
Newspapers are not coming back and the Web is not coming back either
GNU/Linux Consolidates in North America
Android rising a lot this year, too
[Meme] More Monopolies Granted While Patent Examiners Die (Overworking for Less Compensation)
Work more; Get less
Staff Union of the EPO (SUEPO) is Taking the New Pension Scheme (NPS) to an International Tribunal (ILOAT)
SUEPO wants more EPO staff to participate in collective action
Stella Assange and the Legal Team Speak to the Media a Day After WikiLeaks Founder Julian Assange Arrives in Australia
Published yesterday by a number of mainstream publishers
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, June 27, 2024
IRC logs for Thursday, June 27, 2024
RIP Daniel Bristot de Oliveira, Red Hat death
Reprinted with permission from Daniel Pocock