SAN FRANCISCO (Reuters)—As expected, Yahoo Inc began carrying out layoffs up to 1,000 employees on Tuesday, as part of job cutbacks announced last month, several employees at the company's headquarters said on Tuesday.

A spokeswoman for Yahoo, which is seeking to fend off an unsolicited takeover bid by Microsoft Corp, declined to comment on the cutbacks beyond the general outlines Yahoo executives provided in an investor conference call last month.

One Yahoo engineering manager who was having to fire staff himself said the cuts were spread across a variety of divisions. They are performance-based rather than part of a plan to shut-down whole operations, said the source, who declined to be named. He gave no further details.

Chief Executive Jerry Yang last month forecast a tough 2008 year for the Sunnyvale, California-based company as he pledged to reduce Yahoo's work force by around 7 percent. The company had 14,300 employees at the end of 2007.

Subsequently, Microsoft unveiled a plan to acquire Yahoo. Yahoo's board of directors rebuffed Microsoft's offer on Monday of $31 a share, saying it "substantially undervalues Yahoo." Many Wall Street analysts believe the two sides will eventually agree to merge if Microsoft comes back with a higher offer.

(Reporting by Eric Auchard; Editing by Andre Grenon)

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