Yahoo to Lay Off 2,000 Employees
Yahoo Inc will lay off 2,000 people, or 14 percent of its workforce, in its deepest round of job cuts in years as new Chief Executive Scott Thompson tries to jumpstart growth from within a leaner, more agile company while saving hundreds of millions of dollars.
Wall Street was lukewarm on the move, after two previous CEOs failed to find an answer to rivals like Web-search giant Google and the Facebook social-networking site.
Sunnyvale, California-based Yahoo, which ended 2011 with some 14,000 employees, said it would save $375 million annually from the cuts, and will incur a pretax cash charge in the second quarter of $125 million to $145 million.
The company declined to comment on severance details.
Some analysts were skeptical about the layoffs, which had been widely expected.
“You can’t cut your way to revenue growth,” said Colin Gillis of BGC Partners. “What people want to see out of Yahoo is they want to see a plan and provision for revenue growth.”
Thompson, who took over from the outspoken and occasionally profane Carol Bartz, argued the changes would transform Yahoo into a leaner outfit focused on its core businesses which were identified as “co re media and communications,” “platforms” and “data.”
“The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done,” Thompson said in a memo to employees on Wednesday, obtained by Reuters, adding that the changes will results in a “smaller, nimbler, more profitable” company.
“We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities,” Thompson wrote.