Microsoft is to lay off 73 copying and distribution workers at its Sandyford base, as part of a restructure of its operations, the company said yesterday. Some of those made redundant are likely to be re-hired by Irish companies to whom the work has been contracted out.

In a statement, Microsoft also said it was investing $5 million in a new CD manufacturing operation, creating 25 new jobs. These posts are likely to be filled in the main from the 73 redundant workers.

The company said it had a global strategy of using a "turnkey" manufacturing and distribution model. In other words, while it retains control of writing and localising all of its software products, it devolves the entire responsibility for manufacturing and distribution to other companies.

"Under Microsoft's new operations strategy, Walsh Western has been selected as the distribution partner, and Modus Media and Banta Global Turnkey Services have been selected as the manufacturing turnkey partners," the company said.

Microsoft, the world's largest software company, employs 940 people in its European Operations Centre in Dublin.