Microsoft Looks to Calm Workers, Yahoo Employees on Job Overlap

Microsoft Looks to Calm Workers, Yahoo Employees on Job Overlap

Feb. 23 (Bloomberg) -- Microsoft Corp., trying to reassure employees concerned that the purchase of Yahoo! Inc. will result in job cuts, will aim to find new positions for workers whose roles overlap.

``People are the single most important asset in this combination,'' Kevin Johnson, president of the Windows and Internet division, said of the $44.6 billion offer in an e-mail to his employees published on Microsoft's Web site yesterday.

Microsoft is trying to allay fears that the proposed combination will result in firings since both companies have similar products. This week, Yahoo adopted severance plans for employees that would pay as much as two years of salary if they depart after a purchase, reminding them that their jobs may not be secure.

``While some overlap is expected in any combination of this size, we should remember that Microsoft is a growth company that has hired over 20,000 people since 2005,'' Johnson said. ``We would look to place talented employees throughout the company.''

Yahoo, based in Sunnyvale, California, has already cut jobs, announcing a 7.1 percent reduction to its 14,000-person workforce on Jan. 29, prior to the Microsoft bid. The cutbacks, which total 1,000 jobs, started last week.

Johnson, noting he wants the best people at the combined company, promised to ``dedicate significant rewards and compensation'' to Yahoo and Microsoft employees.

Yahoo Departures

Last week, Bradley Horowitz and Salim Ismail, who headed internal startup units at Yahoo, announced their departure from the company. Both said they left voluntarily.

Microsoft, based in Redmond, Washington, fell 42 cents to $27.68 yesterday in Nasdaq Stock Market trading, and has declined 15 percent since the company announced its bid for Yahoo on Feb. 1. Yahoo shares, which have risen 48 percent since the offer, were unchanged at $28.42.

Integration planning can't begin until the two companies agree on a deal, Johnson said. Microsoft intends to involve Yahoo leaders and employees in that process, he said.

Microsoft plans to keep Yahoo's presence in Silicon Valley and wants to ``build on the Yahoo brand,'' Johnson said. It's too soon to say which brands Microsoft will use for the combined products, he said.

Johnson also told workers that Microsoft is still looking to discuss the purchase with Yahoo, whose board has rejected the offer.

``We look forward to a constructive dialogue with Yahoo's board, management, shareholders and employees on the value of this combination,'' he said.

BLOOMBERG