Microsoft says no major lay-offs in Yahoo merger

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, which was posted on Microsoft's Web site.

The e-mail sought to ease some of the concerns expressed by Microsoft and Yahoo employees about a potential merger.

The companies are at a stand-off in Microsoft's 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.

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.

(Reporting by Daisuke Wakabayashi; Editing by Braden Reddall)