Fin24

Yahoo lays off 2 000 employees

2012-04-04 15:48

YAHOO said it is laying off 2 000 employees, signalling a broad shakeup of the company.
 
“Today’s actions are an important next step towards a bold, new Yahoo - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” CEO Scott Thompson said on Wednesday.

“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.”

Yahoo, which ended 2011 with roughly 14 000 employees, said it would save $375m annually from the cuts.

It will incur a pretax cash charge in the second quarter of $125m to $145m in connection with the cuts, it said.

The company declined to comment on severance details.

Some analysts seemed sceptical about the layoffs, which had been widely expected.

“You can’t cut your way to revenue growth,” said Colin Gillis of BGC Partners. “What people want to see out of Yahoo is they want to see a plan and provision for revenue growth.”

Yahoo said it would provide more details when it releases first-quarter results on April 17.

The layoffs come as Yahoo’s revenue declines amid competition from Web rivals Google and Facebook, and as the company fights a proxy battle with hedge fund manager Daniel Loeb.

Loeb, who runs Third Point, is seeking to appoint four new directors to Yahoo’s board. Third Point, with a 5.8% stake in Yahoo, is the company’s largest shareholder.