The way Phil Palios sees it, someone had to step up and take a stand against the tech giant that is the Microsoft Corp.

The bright boy who grew up in Redmond, dreaming of working for Bill Gates’ empire some day, is now disturbed by its business practices.

Palios, 23, a temporary worker for Redmond-based Microsoft, is spearheading a nightly labor protest on a busy Overlake corner of Microsoft’s sprawling campus.

Last week, Microsoft told its third-party, temporary staffing agencies that it would cut bill rates by 10 percent in an effort to slash spending, according to Microsoft spokesperson Lou Gellos.

Some of the temporary staffing agencies are absorbing the cutbacks internally. But many of the major temporary staffing agencies, including Volt Services Group — the one that placed Palios — told employees that they will need to agree to wage cuts of up to 10 percent or lose their jobs.

For Palios, who is serving his third assignment as a software design engineer in Test at Microsoft, that means going from about $34 an hour to $30.

“I don’t think it was fair. I’m not going to accept the pay cut from them,” Palios said. “I was waiting for someone to step up and no one did, so here I am. We need to make this an active issue.”

Volt sent out a letter to all its temporary Microsoft workers last Friday evening and announced that they have to agree to a 10 percent pay cut and sign an amended contract by March 13.

Palios, who met with his Volt supervisors on Tuesday, said he plans on not signing the contract, saying the cutbacks are unethical and unjustified.

Time to protest

Palios and other affected temp workers have spent every evening this week standing on the corner of 156th Northeast Avenue and Northeast 40th Street, holding up signs that say, “I’m a PC — Pay Cut.”

Palios sent an Outlook meeting request to about 2,000 temporary workers to publicize the peaceful protests, which are located right across State Route 520 from a massive Microsoft construction development.

“By uniting as valuable people who work at Microsoft, we can show our concern and force an alternate course of action,” Palios wrote in the e-mail.

Palios and others will continue the protests next week in hopes of garnering more publicity and support.

Palios said the cutbacks are “bad labor practices” for a company that reported a $4 billion profit last quarter. The temp agencies are also to blame, Palios said, pointing out that the temp agencies get a huge chunk of money from Microsoft and pass only a small percentage onto its workers.

Cutbacks to the temporary workers come just weeks after Microsoft announced 1,400 layoffs, with 2,000-3,000 more to come over the next 18 months. Microsoft also stalled several construction projects and will not offer merit raises for employees this year in order to cut costs.

Gellos had no comment on the protests, but did say, “We are in tough times, not just here at Microsoft, but everywhere.”

Palios said about 7,000 temporary workers are affected by Microsoft’s cutbacks, some more than others.

The bottom line is, Microsoft’s cutbacks just make the economy worse, said Rick Collins, serving his fourth assignment with Microsoft through Volt.

“This whole situation is going to make the recession worse,” said Collins, standing in the wind and rain holding up his Pay Cut sign. “Thousands and thousands of people are getting a 10 percent pay cut. Most of the people I know, that means they can’t pay their bills anymore. How does that help the economy?”

Like Palios, Collins said he plans to stand at the busy Overlake corner through next week, hoping people will see his point.

“We have to show we are not going to stand for this,” he said.

Facing their critics

Many who have read about Palios’ street-corner labor movement, are not feeling the love for high-paid software engineers getting a slight cut in pay when thousands of others, working for the same company, have been laid off or will be looking for a new job soon.

“I’m not asking people to feel sorry for me,” Palios said. “I’m just concerned how Microsoft deals with their temporary employees. For many, a 10 percent cut hurts. It puts them in a panic situation.”

Collins, who declined to disclose how much he made, but did say “I make a good income,” said the protests are not about the money, but about “the ethics of the situation.”

“It’s how things are being done, how we were treated.”

A love-hate relationship

Palios never thought he would be leading a rally against the company he grew up hoping to work for.

Palios attended Redmond Elementary School and then really started to become a big Microsoft fan when he went to Redmond Junior High.

“I saw Bill Gates,” he said. “He was a prominent figure in software and I wanted to work for him.”

Palios, a self-admitted techie, graduated in 2003 from Redmond High, where he participated in Running Start, which allowed him to take college courses at Bellevue Community College. In addition, during his time at Redmond Junior and High School, he was member of Lake Washington Online, a discussion group with other students “before the Internet really took off.”

He grew up using and loving technology. Now he is standing up against one of the biggest tech company’s in the world — and time will tell how far this fight really goes.

Palios continues to take classes at Bellevue Community College part-time, while working at Microsoft. He has two more months left on his current contract, but realizes his days working for Microsoft may be numbered.

“We need to form an alliance and prevent this from happening again,” he said. “I believe it’s worth fighting for.”