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Yahoo poised to lay off hundreds of workers

Yahoo poised to lay off hundreds of workers
AP
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First Published: Tue, Jan 22 2008. 01 05 PM IST
Updated: Tue, Jan 22 2008. 01 05 PM IST
California: Yahoo Inc. is poised to lay off hundreds of workers as part of the slumping Internet icon’s effort to sharpen its focus and boost its sagging stock, according to published reports.
The New York Times and The Wall Street Journal both reported Yahoo’s cost-cutting plans on 21 January, citing people familiar with the matter.
Precisely how many of Yahoo’s roughly 14,000 employees will lose their jobs has not been determined, the newspapers said. A final decision could be announced on 29 January when Yahoo executives are scheduled to review the Sunnyvale-based company’s fourth-quarter results.
The payroll purge was first reported over the weekend by Silicon Alley Insider, a blog focused on investments in technology and media. The blog said Yahoo had drawn up a list of 1,500 to 2,500 jobs that could be eliminated, but 21 January’s reports indicated management does not expect the cuts to be that deep.
A Yahoo spokeswoman did not immediately return calls seeking comment on 21 January.
It won’t come as a surprise if Yahoo jettisons workers, said Global Equities Research analyst Trip Chowdhry. He believes Yahoo has room to trim its work force by about 5%, or 700 employees, after phasing out some of its services, such as auctions and photos, during the past year.
“It’s natural for them to truncate some at this point,” he said.
If several hundred employees are dumped, it will mark Yahoo’s most extensive layoffs since 2001 when the company was trying to battle back from the dot-com bust.
Unlike then, Yahoo is profitable now. But it has not been making enough money to keep Wall Street happy.
Besides falling further behind Silicon Valley rival Google Inc. in the lucrative Internet search and advertising market, Yahoo also has been struggling to hold on to younger Web surfers as they spend more time on hip online hangouts like Facebook.com and MySpace.com.
The problems have slowed Yahoo’s revenue growth even as spending on online ads accelerates. That trend has devastated Yahoo’s stock, which has plunged by nearly 50% since the end of 2005. Yahoo shares finished last week at $20.78.
With shareholders clamoring for a shake-up, Yahoo co-founder Jerry Yang took over as the company’s chief executive last June, replacing former movie studio mogul Terry Semel.
Yang has promised to re-establish Yahoo’s position as the Web’s most popular “starting point” while building a compelling ad network, but his progress hasn’t impressed investors so far. Since Yang became CEO, Yahoo’s stock price has declined by 25% while Google shares have surged by more than 15%.
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First Published: Tue, Jan 22 2008. 01 05 PM IST
More Topics: US | Yahoo | Layoffs | Employees | Google |