Big Yahoo Layoffs Coming Soon?; Yahoo’s Response
By Rafat Ali - Sat 19 Jan 2008 10:23 PM PST
Update: Yahoo’s (NSDQ: YHOO) response just came in—no numbers but confirmation that signification shifts are underway: “Yahoo! has embarked on a multi-year transformation that includes making tough decisions about the business to help the company grow. Yahoo! has focused its efforts to support its strategy to become the indispensable starting point for consumers, advertisers, publishers and developers. Yahoo! plans to invest in some areas, reduce emphasis in others, and eliminate some areas of the business that don’t support the Company’s priorities. Yahoo! continues to attract and hire talent against the company’s key initiatives to create long-term stockholder value.”
Original: We have been following a tip since the start of January, that Yahoo is preparing ground for a big round of layoffs, and have been digging since on clues and leads. Now SAI gets an anonymous tip (ours wasn’t) which says the same thing, with a number to it: that the company has created a list of 1,500-2,500 jobs that may be eliminated in the next two weeks, and CEO Jerry Yang will decide whether to go ahead or not. The company has a total of about 12,000 employees. More after the jump…
Yahoo is announcing its Q407 earnings on Jan 29th, so one school of thought is the company will do the call, see what the hit is to its stock and then decide on the cuts, one way or the other.
Yesterday Techcrunch reported on a small bunch of layoffs including from the Yahoo’s Brand Universe project (which Vince Broady was heading, and after that project got killed, left last week) and Yahoo Answers team. Broady’s group got its severance packages yesterday, we have heard.
My guess is that the a big part of the layoffs, if they happen, may come from some European units, as the company has hinted recently. Toby Coppel, the head Yahoo’s European business, gave an ominous warning in an FT story in November: Yahoo staff was given until Q1 2008 to revamp the poorly performing parts of its European business, or these would be closed down or sold. Also, the FT story said Yahoo could think about outsourcing some European search operations to third parties, which would affect the company headcount as well.
In a related BreakingViews/WJ opinion article yesterday, the authors make a case for completely outsourcing Yahoo’s search operations worldwide, to Microsoft (NSDQ: MSFT), or even Google (NSDQ: GOOG), for a big fee...this isn’t the first time it has been proposed...many analysts have said the same thing. Then, there are Yahoo’s stakes in Yahoo Japan and Alibaba, which the column says could be spun-off into a different unit and spun off.
This may be the radical rethink Yang had promised in the first 100 days of his taking over as CEO, only delayed by another 100 days or so.
(Pic courtesy: Yodel Anecdotal’s feed on Flickr: Jerry Yang and David Filo at Yang’s CES keynote earlier this month)






