Yahoo To Cut 20% Of Its Workforce?

Silicon Alley Insider is reporting that Yahoo (YHOO) is preparing to lay off up to 20% of its 12,000 strong workforce, a big purge as the Sunnyvale based company attempts to become more profitable.

Talks of staff downsizing at Yahoo have been doing the rounds since former CEO Terry Semel left Yahoo in June.

Despite traffic to Yahoo properties remaining ahead of Google (according to comScore), YHOO stock has performed poorly over the last twelve months months as the company has failed to convert that traffic to strong profit growth, unlike Google.

SAI’s source claims that the move is about improving the outlook for Yahoo and strengthening its position so it can remain a standalone company by increasing the share price. We don’t know directly but this seems to be logical reasoning. There will be a lot of Yahoo employee’s who will not be enjoying their Martin Luther King holiday long weekend now this news has leaked.

If you’re working for Yahoo and know more, drop us a line.

Update (Arrington): I’ve been on a plane all day, but have some additional facts on this (we were holding the story until early this week per our source’s request): The layoffs will be 10%-20% and are being recommended by the executive team after a recent offsite. The board will make the final decision at a meeting two days before the next earnings call on January 29. Layoffs will likely be announced then.

Comments

[Long-Short Guy:]

Hard to see how Yahoo can compete with Google if Google keeps hiring the smartest people and Yahoo cuts its workforce.

2008 Jan 21 02:41 AM

[Jose Goldbu...:]

Yahoo should fire 50% of their workers. There is nothing that they do today that requires more than 6,000 workers. In fact, if Yahoo improved their IT systems, they could probably run the existing company using only 3,000-4,000 workers. There's just not a lot going on at Yahoo once you cut out the 'Hollywood'.

Yahoo trying to be an entertainment company (i.e. 'infotainment') is a business model that is doomed to failure. The current management team needs to reinvent Yahoo so that there is value delivered to the market across every Yahoo business unit.

yyy.

Good luck, Yahoo amigos.

2008 Jan 21 05:08 AM

[Roger Cuddy:]

It would probably behoove Yahoo to take a hard look at where it's winning and where it's losing. I don't know anyone who would even think to go to yahoo for searching the web but at the same time we all use the finance site, finance.yahoo.com .

2008 Jan 22 01:09 AM

[fedup:]

It's a shame Terry Semel couldn't just give back some of the millions he obviously didn't deserve instead of Yahoo firing its workers. Seems some of that company's biggest problems lie in an inability to support it's customer base or properly manage too many assets. Having 20% less bodies to accomplish this certainly won't help. Especially considering the lack of motivation the average Yahoo employee is going to posses after even more work is lumped on them, while their higher ups still make millions. Thanks to option shenanigans, that's true whether the stock holders are losing money as usual too. It's win-win for those at the top of Yahoo's pyramid of power and gross mismanagement complex. Maybe all those employees should take their severances and invest them in buying back the company once the stock is abundantly cheap and plentiful soon. They are the only ones that truly seem to care about the company anyway. The execs are just milking it until it's sold later this year.

Kind of poetic justice given that Yahoo aided the those mortgage loan scammers to groom their victims with invasive marketing tactics that mine user data. Countrywipe and Leaning Tree are still working it hard on Yahoo networks, trolling for new suckers. They can afford it now, after being bailed out instead of punished for sending the world's economies into the toilet, while they fly to Barbados this winter. Too bad all the homeless freezing in the streets could not get so lucky. Guess they can always go warm up in Iraq.

2008 Jan 22 04:02 AM

[User 142854:]

Good management would re-deploy the people. Cutting is not management.

Instead of Chainsaw Al (Dunlap) will we soon be talking about Chainsaw Yang?

Name me one company that has cut its way to greatness.

Signed,

--A Yahoo shareholder who is not also an employee.--

2008 Jan 22 01:48 PM