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Microsoft layoffs hit several products

Software maker is downsizing its ambitions in several areas including its ResponsePoint phone system for small businesses.

In the wake of additional layoffs on Tuesday, Microsoft is scaling back--but not totally eliminating--several products. After cutting 1,400 jobs in January, Microsoft said on Tuesday that it is cutting more than 3,000 more jobs.

Among those products affected are Microsoft's ResponsePoint phone system, its .Net Micro Framework, and its MSN Direct Service.

Microsoft said it will continue to sell and support the initial version of ResponsePoint, which is aimed at small businesses.

"We will also continue to promote the product online and spotlight compatible 3rd party services and add-on products," Microsoft said in a statement. "The team is evaluating the strategy for the next version of the product and will continue to investigate the opportunity in the small business market."

Things are similar for MSN Direct, which offers traffic and other services to devices like in-car map systems.

"While the group was impacted by yesterday's job eliminations, they will continue to maintain the current MSN Direct service and invest in developing a low cost receiver for multiple devices," Microsoft said.

As for the .Net Micro Framework, Microsoft said it will make the project a community source effort.

"Microsoft will continue to support existing customers according to any agreements that we have in place with them, and will honor our lifecycle support pledge," Microsoft said. "Forums continue to be available at MSDN. After moving to the community model, new customers will be supported by the community."

The software maker said it will eliminate the royalties that had been associated with the product. As a result of the shift, Microsoft said the team was affected by job cuts and the remaining workers will shift to the broader .Net Framework team.

Microsoft also confirmed it made deep cuts at Massive, its in-game advertising unit. However, the company said a report Tuesday that three-quarters of staff were cut was an overstatement. Tuesday's cuts affected 28 percent of full-time staff. The cuts also apparently hit hard two Microsoft-produced magazines for developers, but I am still working on getting details on that front.

Also of note, of course, is the fact that after the January cuts it took some time for some of the product decisions to be clear. At the time, Microsoft said it would cut 5,000 jobs over an 18-month-period.

Meanwhile, Microsoft left the door open to further job cuts.

"As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure including additional job eliminations," Ballmer said in a memo to staff.

The company has also taken other actions including cutting spending on vendors, travel, and contractors, and even canceling its annual picnic.