Rs 100 crore loss to Yahoo! due to layoffs
Yahoo Inc had recently announced plans to cut down its worldwide workforce by around 1,000 employees.business Updated: Feb 17, 2008 14:42 IST
Internet major Yahoo!, currently resisting a hostile takeover bid by software giant Microsoft, will incur about Rs 100 crore in severance payouts and other expenses related to its planned job cuts across the world, which includes about 40 people in India.
The internet firm, in a regulatory filing in New York on Friday, said, "In connection with the strategic workforce realignment, the company expects to incur pre-tax cash charges of 20-25 million dollars (about Rs 100 crore) for severance pay expenses and related cash expenditures associated with the workforce reductions. The company expects to recognise the majority of the foregoing charges in the first quarter of 2008, with the remaining costs being recognised over the remainder of 2008."
Yahoo! had recently announced plans to cut down its worldwide workforce by 1,000 employees, which was followed by about 40 people being told to quit at its India operations in Bangalore.
When contacted by PTI, the company's spokesperson for India had confirmed the move but declined to reveal the exact number of employees sacked there.
The company had announced the job cuts at the time of announcing a 23 per cent drop in its fourth quarter profits 205.7 million dollars, late last month. The move was aimed at reducing its annual expenditure.
Yahoo! disclosed in the filing that it started issuing notices to employees, whose employment would be terminated as a part of the realignment, on February 11.
"The strategic realignment involves investing resources in some areas, reducing resources in others and eliminating some areas of the company's business that do not support the company's strategic priorities," it added.
In the filing, the firm said, "... Total charges will include these cash charges plus additional charges related to stock compensation expense which the company is unable to estimate at this time."
On February 11, Yahoo! had rejected the 44.6 billion-dollar takeover offer of software giant Microsoft, saying the bid "substantially undervalues the company, including its global brand and worldwide audience".
Microsoft had made an unsolicited 44.6 billion dollar in cash and stock takeover bid to Yahoo!.