Microsoft may spend big to keep Yahoo staff

Microsoft has considered setting aside $1.5bn (£762m) for the retention of Yahoo staff if the company's takeover attempt proves successful.

The figure was revealed as part of a shareholder action lawsuit filed against Yahoo in February by two pension funds. The earmarked sum was originally discussed by counsels from both companies and was referenced by lawyer Edward Welch in a hearing on 24 March.

Welch also said that Yahoo was not planning to make any further job cuts beyond the 1,000 redundancies made in February this year. A full transcript of the hearing has been made available here by lawfirm Bernstein Litowitz Berger & Grossmann LLP.

The case against Yahoo was filed by shareholders on the grounds that the search firm did not respond in good faith to Microsoft's $44.6bn takeover offer. The extended deadline for the proposal expired last weekend, but both companies have yet to make a public statement on the matter.

US media sources are reporting that Microsoft may nominate a proxy slate of directors to replace the Yahoo board. The software giant previously announced that it would consider inciting a shareholder revolt if its initial bid were to be rejected.

See also:

Deadline expires on Microsoft's Yahoo offer

The software giant may now target shareholders in its attempts to buy the search firm  28 Apr 2008

Microsoft profit slips 11 per cent

Third-quarter revenue has remained steady at £7.31bn  25 Apr 2008

Yahoo posts solid first-quarter results

Profit has tripled to £271m, but Microsoft's takeover bid still casts a shadow  23 Apr 2008

Murdoch: No direct bid for Yahoo

But the door remains open for a possible joint offer with Microsoft  22 Apr 2008

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