Microsoft spokeswoman Ginny Terzano said the decision to end Reed's retainer was part of routine reshuffling of consultants, the Settle Post-Intelligencer reported Saturday.
"I will confirm that Ralph Reed is no longer on retainer," Terzano, who added Reed was hired only to advise the company on "international trade and competitive issues." "He did not do any work on social issues for us."
Reed, currently running for lieutenant governor of Georgia as a Republican, served as chairman of President George W. Bush's re-election campaign for the Southeast, and led the Christian Coalition from 1989 to 1997.
Microsoft was attacked after it backed off its support for homosexual rights legislation in the Washington state legislature, which failed. The software company later reversed its position and earlier this month Microsoft said would actively support gay rights legislation in the future.
The company's decision to sever its seven-year on-and-off relationship with Reed was first reported Thursday on the Web site of Seattle Weekly, which cited anonymous sources.