In this case it is far worse. This is a 10% cut in the rate to the employment agency, so they have to cut the employees wage even further, on costs, insurance, profit etc, employees themselves are likely to get around double that cut.
I see that you have some problem with economics. Reduced pay for employees results in reduced spending, which generates lay-offs. A lot of people base their debt payments upon the salary level with out much gap between them. A 20% pay cut will often result in bankruptcy, as the employees can not just whip up a quick letter telling their creditors they will now be paying them 20% less and if they don't like it, they wont pay them anything.
Now is the pay cut to enable M$ to survive or is it to allow M$ to maintain it's current profit margin or even increase them. M$ has a history of having a total disregard for the costs of it's actions upon other people and companies as long their own profits keep increasing.
You're right. This is what's going to happen. This is what most people do.
That said, what kinda idiots do this? Why do so many people believe they shouldn't have any contingency plans in life? Next month, I could be hit by a bus. If I do, I live in Canada, so medical costs will be okay, I have credit card insurance to cover a year of interest payments on that (it only costs me $5/month), and I save enough money that I'll be able to live, if miserably, for at least 6 months. Why don't more people do this? And don't say they can't, because the people who are going to be missing their mortgages had enough money to buy a house, apparently, so they should have gotten a cheaper one or continued to rent until they could *actually* afford a house. gah!