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

This is How Microsoft's XBox and Entire Consoles (If Not Gaming) Ventures Will Ultimately Die
Ensure you can blame "Tariffs" (politics)? If not "hey hi", the fashionable go-to excuse when businesses fail?
The Complaint About Brett Wilson LLP - Part II - UK SLAPPs for Americans, SLAPPs for Profit
Brett Wilson LLP has a track record of this kind
Cloudflare Gives Us All Another Reason to Boycott Cloudflare
If Cloudflare wants to use its vast surveillance network (which is what it does as a CDN) to foist paywalls and maybe something worse (like DRM on top), then Cloudflare should be more widely rejected as a company
Someone Expiring Certificates on the Day of the 9/11 Attacks is Not Someone I Would Want Controlling My PC (or Deciding What's Authorised for Booting)
"social justice warriors"
More Microsoft-Red Hat Cross-Pollination as the Company Loses a Managing Director
some people move from Microsoft to Red Hat and some do the opposite
 
Punching People Doesn't Work
It makes nobody any safer
Look Ma, No "Cloud"
So far this year we've had an almost perfect uptime
Links 24/09/2025: Autism Blame-Shifting and Typhoon Ragasa Enters China
Links for the day
Buying From Oneself is Not Business Success
This isn't at all a joking matter even if you already laugh at the whole thing because your pension, savings etc. are tied to this scam at some level
What They Really Hate David Heinemeier Hansson (DHH) for
Nothing to do with code
Smart People Won't Buy 'Smart' Cars
Imagine trying to sell someone a house (proper home) while insisting that it'll need to be demolished 5 or 10 years later, then rebuilt again from scratch on the same vacant lot
The Relationship Between IBM Red Hat and Microsoft, Visualised
This metaphor goes a long way (projects, collaborations, and outsourcing
The Complaint About Brett Wilson LLP - Part III - Spying on Reporters' Families, Chaining Cases for Microsoft Employees Who Demand Censorship of Facts (Even Politely Expressed)
the time seems right to wrap up this introductory series
Links 24/09/2025: "NASA Moving Out of Entire Buildings as It's Gutted" and Purge of Online Critics (Opposing Fascism Becomes Unlawful)
Links for the day
Science is Under Attack
Oligarchy prefers a dumbed-down population
The Solicitors Regulation Authority (SRA) Has Reportedly Failed People With Wrong Advice
At the moment the SRA has a PR blunder
The Man Suing Brett Wilson LLP and Gervase de Wilde (5RB)
Now he's probably using the (almost) 200,000 pounds he's supposed to receive to sue Brett Wilson LLP and former colleagues/partners
Slopwatch: A World Wide Web That's Rotting for Companies That Won't Even Exist in a Few Years
some of the junk Google News is promoting
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, September 23, 2025
IRC logs for Tuesday, September 23, 2025
Links 24/09/2025: Qt Creator 18 Beta, Microsoft Cannot Bail Out "ChatGPT" Anymore, China and US Intensify Censorship
Links for the day
Gemini Links 24/09/2025: Gemlogs and Politics
Links for the day
Links 23/09/2025: Japan Limits Uses of Skinnerboxes ('Smartphones') With Toxic "Apps", Fentanylware (TikTok) Tapped by "MAGAts"
Links for the day
Brett Wilson LLP Has Just Been Sued (by Their Own Clients!)
Vladimir and Alla Yanpolsky sued Brett Wilson LLP in BL-2025-001167 at the end of last week
Mayday: Optus emergency calling crisis
Reprinted with permission from Daniel Pocock
Links 23/09/2025: Massive Data Breach, Slop Versus Productivity, and Vista 11 Update Breaks Things Again
Links for the day
Code of Censorship
Extortion is peace
The Free Software Foundation (FSF) Has Un-cancelled the Best People, Just in Time for the Big 4-0
Mr. Oliva should have been there all along (since 2019)
Most "Modern" Technology Makes You Slower and Dumber
Because proprietary software makes you worse off
"What Comes After Free Software?" Wrongly Insinuates We've Reached the Goal (Prison is Not the Goal)
The oil tycoons use similar tactics against environmentalists, giving them fake "wins"
Making More Work Space
I learned the hard way that less is more in circumstances where more means distraction
MAHA is a Lie, Public Officials Never Valued Citizens' Health (They Still Value Private Businesses, Their Sponsors)
Reject demagogues
Free Software Foundation (FSF) Has a New Press Kit for the Weekend After Next Weekend (40th Anniversary)
miles better than social [sic] media [sic] quips, moderated by narcissists and oil tycoons.
Microsoft Had Two Waves of Mass Layoffs This Month (That We Know of) and It'll Get Worse for Microsoft Soon
Will the axe fall again by month's end?
Gemini Links 23/09/2025: Happy Equinox, Photronic Arts, and Perception Cognition
Links for the day
Lessons We've Learned After 17 Years of American Hosting
GAFAM is "all-in" with the "Trump agenda"
Back to Normal Now, We Plan to Do More In-Depth Series (or Multi-part Stories)
Articles (or series thereof) that contain philosophy are important to us
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, September 22, 2025
IRC logs for Monday, September 22, 2025
Microsoft Media is Panicking Amid Mass Layoffs Every Month, H-1B Fees, and "Seattle’s Tech Scene in Trouble"
In "late stage Microsoft", copyleft becomes proprietary
The Next Wave of IBM/Red Hat Layoffs Being Discussed Already
Red Hat is sort of disappearing the way Tivoli did
New Techrights Turns 2
Today starts the third year of the SSG-based Techrights
What Scares Them the Most is Independent News Sites That They Cannot Control and Censor
Wikileaks was a good example of this
If You Don't Control Your Online Platform, Then Someone Else is Controlling You
be (or become) independent
Oracle Started This Year With Slop. Then It Stopped.
Passing fads are like this
Distros That Run on PCs Made 20 Years Ago and Don't Use Systemd
Betas for now
The Solicitors Regulation Authority (SRA) Has a Policy on Racism and Sexism
In then future we'll show the misogyny and racial slurs
The Complaint About Brett Wilson LLP - Part I - Abusing British Women on Behalf of American Men Who Abuse American Women
Transparency is important to us, so we've decided to make this series
Slopwatch: Google News and the Evident Slopfarm Infestation
This is what people get about Linux when they query Google for Linux
Links 22/09/2025: Murdochs Might Join Fentanylware (TikTok) 'Investors' (Masters), United Kingdom Recognises Palestinian Statehood
Links for the day
Gemini Links 22/09/2025: Esperanto Music History and Apps For Android
Links for the day
Links 22/09/2025: More American 'Censorship' (Retaliation for Journalism), Cheeto "Might Be Losing His Race Against Time"
Links for the day
The Blob Slop
Give me more words, give me some text
The 50-Pound Note Experiment and the "War on Cash"
Britain is actually seeing a rebound in cash payments, and it's not a temporary phenomenon
Slopwatch: Blaming the Victims for Microsoft's Failures and Plagiarising Phoronix
That's what Google has been reduced to: slop and slopfarms
Links 22/09/2025: Breaches, Windows TCO, and Arrests
Links for the day
Gemini Links 22/09/2025: Rabbit Hole and DeGoogling Fairphone
Links for the day
Links 22/09/2025: Russian War Planes Invade NATO Airspace While Dihydroxyacetone Man Escalates Attack on Free Speech Because of Critics
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, September 21, 2025
IRC logs for Sunday, September 21, 2025