Microsoft may have trouble retaining engineers

Labour experts predict that turmoil from the antitrust case may give competitors an opening to steal Microsofts top-notch software engineers and other employees.

          Labour experts are predicting that turmoil from the high-profile antitrust case may give competitors an opening to steal Microsofts top-notch software engineers and other employees.

          "With the government's recent intervention, Microsoft's ... stakehold on the best software engineers may have evaporated," said Jeffrey Christian, chairman and CEO of search firm Christian & Timbers in Cleveland.

          Yesterday, Microsoft executives — as usual after a big court ruling — held a companywide meeting to explain the situation to 37,000 employees and express Microsoft's optimism about its future.

          But published reports in the Washington Post and elsewhere indicated that the pep rally drew muttering, snickers and pointed questions from some Microsoft employees who are starting worry about their future there.

          Recruitment could suffer, too. "Who will want to sign on with a company with a publicly discussed uncertain future — while the appeal process drags on and on?" asked John A. Challenger, CEO at Challenger, Gray & Christmas Inc. in Chicago. "Microsoft recruiters from now on will operate at a huge disadvantage," he said.

          Challenger said Microsoft's human resources department will have trouble retaining the workforce, "no matter how loyal they have been in the past." Why? "Recruiters will plant and replant uncertainty in the minds of the Microsoft workers whom competitors desire the most," he said.

          At the companywide meeting and in press conferences, Microsoft Chairman Bill Gates has urged employees to keep their focus on producing great software and has emphasized his view that eventually the company will be vindicated.

          Asked about employee reaction at a press conference after the court ruling, Gates said: "I think they'll want to know what the schedule looks like going forward, and they'll want to understand the commitment I'm making ... that all the great work they're doing will not be interfered with, that the way we're going to move forward will be exactly as the company has for 25 years in terms of building integrated products that do great things for customers."

          Microsoft itself raised the possibility of staff defections earlier this week, in a different context. In a court filing, Microsoft said the government's antitrust remedy plan is so vague and poorly worded that Microsoft employees might resign if they can't understand how they're supposed to comply with the government order.

          Under the court order, Microsoft employees will have to sign a document certifying that they understand the business conduct rules. Microsoft's filing said that its employees — "many of whom are engineers accustomed to precision" — would be unable to certify that they understand the rules because the document is "unintelligible."

          "Faced with the prospect of certifying that they understand something they do not, many Microsoft employees might choose to resign instead," the filing said.

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