Microsoft says no major lay-offs in Yahoo merger

SEATTLE: Microsoft Corp suggested on Friday that it had no plans to make major lay-offs if it succeeded in buying Yahoo Inc, saying there were plenty of employee opportunities throughout the company. Kevin Johnson, president of Microsoft's platforms and services division, said in an e-mail to employees in his unit that the company would dedicate "significant rewards and compensation" to retain Yahoo and Microsoft employees. "While some overlap is expected in any combination of this size, we should remember that Microsoft ... has hired over 20,000 people since 2005, and we would look to place talented employees throughout the company as a whole," Johnson wrote in the e-mail that was posted on Microsoft's Web site. "We have no shortage of business and technical opportunities, and we need great people to focus on them." The e-mail sought to ease some of the concerns expressed by Microsoft and Yahoo employees about a potential merger. Yahoo said earlier this week that it had put in place generous severance benefits that would be given to all employees who might be laid off if the company was sold. Analysts said it was common for a company in play to provide "golden parachutes" to take care of employees. The companies are at a stand-off in Microsoft's $41.2 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, which Yahoo's board rejected, saying it undervalued the company. Separately, two pension funds sued Yahoo Inc and its board for rejecting Microsoft's offer. The suit said Yahoo was pursuing other deals that were not as beneficial to its shareholders. Lawsuits by Yahoo shareholders have multiplied in the wake of Yahoo's Feb. 11 refusal to entertain the offer, which represented a 62 percent premium over Yahoo's share price at the time. Johnson, whose division would ultimately absorb most of Yahoo, said the company would be "pragmatic" in how to address Yahoo's computer systems since they are not Windows-based. In some acquisitions, Microsoft has prioritized continuity, according to Johnson, and the company has worked to make sure the acquired company's existing systems worked with Microsoft's own technology infrastructure. He also downplayed the cultural differences between the two companies, seen as a hurdle to a smooth integration, saying some aspects of the two cultures will merge quickly, while others will remain unique. Yahoo would bring a Web-centric view, media expertise and advertising talent to Microsoft, according to Johnson, who said Microsoft plans to maintain Yahoo's presence in Silicon Valley if a deal goes through.