Microsoft is laying off thousands of workers, its second mass layoff in months and its largest in more than two years. The tech giant began sending out layoff notices Wednesday that hit the company's Xbox video game business and other divisions. The company declined to say how many people would be laid off but that it will comprise less than 4% of the workforce it had a year ago. Microsoft said the cuts will affect multiple teams around the world, including its sales division.

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Microsoft Corp. said Wednesday that it is teaming with "Lord of the Rings” director Peter Jackson to create content for its Xbox 360, in part …