Yahoo protects its staff in takeover battle against Microsoft
In the takeover battle with Microsoft, internet firm Yahoo has promised indemnities to all of its employees should anyone have to be laid off. Yahoo said this move was designed to retain staff in light of the uncertain future. At the same time, this step could make a takeover much more expensive for software giant Microsoft.
The indemnity plans state that all full-time employees of Yahoo are to have a right to indemnities and additional bonuses if they are fired within two years of a takeover. The sum varies from one employee to another. The indemnity itself can be as high as two years of salary. In mergers and takeovers, such compensation is quite common for upper and even middle management, but not for all staff members. Yahoo has some 14,300 employees worldwide but is currently cutting some 1000 jobs because of a repeated drop in profit.
Microsoft expects the takeover to save around $1bn, but Redmond has not said whether these savings would partly be the result of layoffs. With the takeover of Yahoo, the world's largest software vendor wants to break Google's domination in online searches and online advertising and improve its position for new Internet services against its apparently more powerful competitor. Yahoo rejected Microsoft's original bid of nearly $45bn as too low.