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Yahoo! to cut 14% of workforce in restructuring

Struggling US Internet firm Yahoo! said today that it would slash some 2,000 jobs in a sweeping restructuring aimed at building a "smaller, nimbler, more profitable" company.
By HT Correspondent | AFP, Washington
UPDATED ON APR 04, 2012 08:55 PM IST

Struggling US Internet firm Yahoo! said on Wednesday that it would slash some 2,000 jobs in a sweeping restructuring aimed at building a "smaller, nimbler, more profitable" company.


Yahoo! chief executive Scott Thompson, who took the top job in January promising urgent action to turn the company around after a year of falling income and profits, said the job cuts were a "tough decision" to achieve that goal.

"We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose -- putting our users and advertisers first -- and we are moving aggressively to achieve that goal," Thompson said in a statement.

The restructuring will focus on a "select" group of core businesses and the platforms that support them, the Sunnyvale, California-based company said.

A key focus will be the data that drives "deep" personalization for users and return on investment for advertisers.

"Today's actions are an important next step toward a bold, new Yahoo! -- smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require," Thompson said.

The company said it would notify approximately 2,000 people that their jobs have been eliminated or would be in the future. It gave no details on the timing of the layoffs.

The 17-year-old company had more than 14,000 employees at the end of 2011. It also has a large number of software contract workers whose could also be affected in the shakeup.

A Yahoo! spokeswoman told AFP that the 14 % workforce reduction was "not across the board" but that "most units have been impacted." She declined to offer further details.

Media reports last month suggested Yahoo! was preparing to lay off thousands of workers. The Dow Jones website All Things Digital said the shakeup could target Yahoo's public relations and marketing division, research, and region-focused and other marginal businesses.

Yahoo! said Wednesday it expects $375 million in annualized savings from the job cuts.

"With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products," it said.

Yahoo! investors welcomed the news, pushing shares up 0.3 % to $15.23 in morning trade in an overall declining market.

Thompson, formerly head of mobile payments firm PayPal, became chief executive in early January after months of turmoil at Yahoo!, including deadlocked talks over possibly selling off the company's valuable assets in China and Japan.

Two weeks after Thompson was recruited, Yahoo! co-founder and former chief executive Jerry Yang resigned from the board of directors. A few weeks later the chairman and three other directors said they would step down, opening the way for Thompson's agenda.

Meanwhile the company's earnings also suffered, angering shareholders.

Operations income was up 3.5 % in 2011 to $800 million, but net earnings fell 14.6 % to $1.06 billion, and earnings per share for the year fell to 82 cents from 90 cents.

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