TECHNOLOGY - Jan. 12, 1996

Microsoft to Lay Off Workers: The software giant said it will lay off 120 of the 645 people at its Seattle-area manufacturing plant because of a lack of demand for software on computer diskettes. The company said the layoffs at its Canyon Park facility signal a shift in consumer demand from 3.5-inch diskettes to CD-ROMs. The company said it is on track to hire 2,000 people this year, a more than 10% increase in its work force. But the lack of demand for Windows 95 on diskettes confirms the widely reported notion that fewer computer users are choosing to upgrade to Windows 95 than originally expected. Since older computers typically do not include CD-ROM drives, such users would have to buy Windows 95 on floppy discs to upgrade. Wholesale channels are reportedly clogged with excess inventories of Windows 95 packages.