The Wall Street Journal
by SCOTT MORRISON
December 13, 2010
Yahoo Inc. is preparing to cut as many as 650 jobs, or almost 5% of its workforce, as early as Tuesday, according to people familiar with the situation.
The cuts are the latest effort by the struggling Internet media company to streamline operations and cut costs as it attempts a multi-year turnaround effort under Chief Executive Carol Bartz.
A spokeswoman for the Sunnyvale, Calif., company declined to comment.
The cuts will be targeted at Yahoo's products group, which builds Web properties like the company's popular news, sports and finance pages, as well as its widely used email service. The group, which recently had about 7,000 employees, is run by chief products officer Blake Irving, a former Microsoft Corp. executive who joined Yahoo in April.
Mr. Irving had previously asked unit heads to prepare operational plans that factored in work force cuts of up to 20%, one person familiar with the matter said. Mr. Irving said in a recent interview that he wants the products group to work more closely with regional teams, so they share common goals and responsibility for achieving operational and financial targets.
Any job cuts at Yahoo would follow two previous rounds of layoffs in recent years. The company cut around 700 workers during the second-quarter of 2009, or about 5% of its work force at the time. And it cut about 1,400 employees in December 2008. Yahoo employed about 14,100 people at the end of October.
Layoffs at Yahoo would stand in stark contrast to other Internet companies, including Google Inc., Facebook Inc., which are competing fiercely with each other to hire top-notch engineers. Google last month told its more than 23,000 employees they would receive a 10% pay raise in January.
Yahoo's turnaround effort has seen it strike a search pact with Microsoft, enabling the Internet giant to focus on its core website properties and its display-advertising business.
But Yahoo has continued to struggle with soft ad sales, especially in North America, the company's most important region. In October, Yahoo said third-quarter revenue rose 1.6%, with revenue from owned and operated display advertising jumping 17%, while search ad sales fell 7%. The company at the time said its third-quarter earnings more than doubled.
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