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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)

Posted in: Companies, Yahoo



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8 Responses:
  • From invitedmedia Sun 20 Jan 2008 12:21 PM

    yeah, let the stock market tell you how to handle your business decisions.

    come on.

  • From yahooinsider Sun 20 Jan 2008 01:09 PM

    they could easily shut off badly managed service like personals, shopping, groups and others.

  • From kates Mon 21 Jan 2008 03:02 AM

    whats happening to yahoo india ..with loads of O/S

  • From preetam mukherjee Mon 21 Jan 2008 07:21 AM

    “Yahoo! has focused its efforts to support its strategy to become the indispensable starting point for consumers, advertisers, publishers and developers.”
    >>> Lol...i’m going to quote the Yahoo! “What we do” statement:
    “Yahoo! powers and delights our communities of users, advertisers, and publishers - all of us united in creating indispensable experiences, and fueled by trust.”
    >>> So now, they’re FOCUSING their efforts to help people consume, and develop as well. And they’ve decided that they’re not ‘fueled by trust’ anymore. =)

    “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.”
    >>> This is rich. Again, from their website, their 4 business pillars are:
    “Content: Access it, personalize it, contribute to it.
    Search and Marketplace: Locate and display any and everything.
    Community: Empower users to express and connect, enable people and information to interact.
    Personalization: What, how, when and where users want Yahoo!”
    >>> So which ones stay and which ones go?!

    “Yahoo! continues to attract and hire talent against the company’s key initiatives to create long-term stockholder value.”
    >>> Yet Another Hierarchical Officious Oracle. I rest my case.

    “Yahoo! has embarked on a multi-year transformation that includes making tough decisions about the business to help the company grow.”
    >>> Right. And Google sells fried chicken.

  • From FedUp Mon 21 Jan 2008 02:25 PM

    Too bad that Semel couldn’t give back some of the millions he obviously didn’t deserve, instead.

  • From one yahoo Mon 21 Jan 2008 06:35 PM

    We Yahoos have been hearing rumors about layoffs for a while, so it will be interesting to see if they pan out this time. What *is* definitely happening is the realignment of employees, moving them away from properties that are seen as less strategic to properties that are seen as mission-critical. Some of the deprioritized properties seem to be running skeleton crews at this point.

  • From Terri McCain Tue 22 Jan 2008 12:18 PM

    Thanks for the inside informtion “one yahoo”. What in the world is this company thinking?
    I am not a person of any consequence, but I am among the millions of others who are just like me. Together we are something that should be listened to by Yahoo.
    When I read above that they might be considering doing away with the Answers Team… and from personal experience with what they have done to the Yahoo!360 .. I repeat… What are these people thinking?
    Answers seems to be one of the most successful projects that they have ever conceived and then put into action.. as well as the Yahoo!360 blog pages and their emailing service.
    There are millions of people like me who know how to turn on a computer and log onto the internet. And that is about as far as it goes with knowledge of how a computer works and how the internet works.. We just know it is fun!

    Most large sites do not have that in mind when they set up their services to the public. Except Yahoo! They have been the most newbie user friendly site that is out there for us to use.

    They have almost lost the entire membership of the Yahoo!360 site to lack of maintenance. We have had no communication from their 360 Product Blog in 3 months.
    Lack of care and communication of thier account holders is what is going to bring this company to its knees soon. If there is no one at the site to click onto the advertising.. what good does stream lining the company do for them.
    The advice from this one person who is among the millions who click onto and use your site everyday is this…
    Come on Yahoo… you can pull it out of the fire if you will let the people in on what the major problem is.. and we will help you work it out, but you have to start listening to us and actually doing what the majority of the people ask you for.. not what you think would be just something super neat to try.. You guys never get out of beta anymore.
    After all… that is what friends are for isn’t it?  And for years Yahoo! You have been a friend to me, and millions of other people.

  • From youtube downloader Mon 07 Jul 2008 08:28 PM

    I don’t think the price of yahoo stock will growing.

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