Yahoo to cut hundreds of workers
Published: Tuesday, January 22, 2008 at 9:34 a.m.
Last Modified: Tuesday, January 22, 2008 at 9:34 a.m.
SUNNYVALE, Calif. - Battered by slow revenue growth and the popularity of social networking Web sites, Yahoo! Inc. is poised to lay off hundreds of workers, according to published reports.
The New York Times and The Wall Street Journal have both reported on the slumping Internet icon's cost-cutting plans, citing people familiar with the matter.
Precisely how many of Yahoo's roughly 14,000 employees will lose their jobs hasn't been determined, the newspapers said. A final decision could be announced Jan. 29 when Yahoo executives are scheduled to review the Sunnyvale-based company's fourth-quarter results.
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.
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 Monday's reports indicated management doesn't expect the cuts to be that deep.
A Yahoo spokeswoman didn't immediately return calls seeking comment.
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 percent, or 700 employees, after phasing out some of its services, such as auctions and photos, during the past year.
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 percent 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 percent while Google shares have surged by more than 15 percent.
Earlier this month, Yahoo opened its mobile platform so outside programmers can develop new applications for Yahoo pages accessed on mobile handsets. Yahoo hopes the mini-applications will bring the company more money from advertising.
The company also unveiled a redesigned home page for mobile phones that includes more content and enables visitors to designate material they want highlighted.
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