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Microsoft is getting lots of attention for a new policy that will prevent its large contract workforce from accessing company buildings and the internal network after 18 months on the job — requiring a six-month break even for “v-dash” vendors who previously were on indefinite assignments.

microsoftlogo1-1024x680It’s a significant change in policy that promises to make many Microsoft teams think twice about using large numbers of contractors — people who work on Microsoft projects through third-party firms. It’s also a major cultural change for the company, which has come to rely heavily on these contract workers.

However, in follow-up communications over the past week, the company is downplaying the impact of the changes. For example, I’ve been hearing from some v-dash workers that they’ve been told there will be a process for making exceptions in some cases, depending on the specific circumstances of their work.

The company is also saying that the end of access to the network and buildings does not necessarily mean that each contractor will need to stop working after 18 months — that some can continue to complete their work without that access.

However, current and former employees still say this won’t be practical in many situations, making the policy change effectively a “shadow layoff” that will result in far fewer contract workers over time.

A Microsoft spokesman tells us via email that the company will be watching the situation closely to assess the impact on its teams.

“The goal of the policy is to protect Microsoft IP, not to cripple the business,” the spokesman says. “Over the coming months, we will work with leaders in the business to understand the specific work being completed, and determine the most appropriate path forward to ensure the work continues to get completed.”

The spokesman adds, “External staff are critical business partners, and while network and building access may be required to effectively complete their work, we often have effective means of working together without granting access, including tools like SharePoint online to collaborate on and share documents.”

Any change in Microsoft’s contractor policies has significant implications for its workforce. Internal numbers obtained by GeekWire show that Microsoft had more than 70,000 contract workers as of last year, compared to about 100,000 direct employees at the time.

It’s clear that Microsoft is seeking to rely less on contract workers in some cases. One example: Kevin Turner, Microsoft’s chief operating officer, said in a memo to the company’s sales and marketing groups last week that the plan is to “reduce our reliance on contingent staff augmentation by over 20 percent year-over-year” in that part of the company, according to Mary Jo Foley of ZDNet.

Previously on GeekWire
Internal memo: Microsoft to cut off all ‘external staff’ after 18 months, imposing mandatory 6-month break
Microsoft’s contractor crackdown: ‘Shadow layoff’ could force big cultural changes inside company

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