Yahoo laying off four percent of workforce

Ronny Kerr · December 14, 2010 · Short URL:

Over 600 employees get a pink slip, managers stay home, CEO Carol Bartz hopefully not smiley today

Yahoo stock over 5Y

As forecasted by several technology news outlets, Yahoo announced Tuesday that the company is laying off around 600 employees, which comes to about four percent of the entire international workforce at Yahoo.

Unfortunately timed right in the middle of the holiday season (but then, what time of the year would be fortunate?), the layoffs are a necessary evil for the cost-cutting company, whose stock has done nothing over the last half decade but plummet and then linger disappointingly low. Since the beginning of 2008, Yahoo has carried out four major rounds of firings totaling in over 4,000 layoffs.

The only official statement from Yahoo:

Today’s personnel changes are part of our ongoing strategy to best position Yahoo! for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace. We’ll continue to hire on a global basis to support our key priorities.

Yahoo! is grateful for the important contributions made by the employees affected by this reduction.  We are offering severance packages and outplacement services to these employees.

What is the “ongoing strategy”? What kind of “differentiated products”? What are the “key priorities”? All the ambiguities in the world can’t really hide the struggle within Yahoo to fit into the Web world of 2010, going on 2011.

“Content, communications, media. That's what Yahoo is," said CEO Carol Bartz, with a contented smile on her face, at the Web 2.0 Summit in San Francisco last month. Bartz, the replacement for Yahoo co-founder Jerry Yang in early 2009, was supposed to restore the company to some sort of former glory. She has done no such thing.

The down-to-earth executive, however, did manage to impress the Web 2.0 audience in November with her fearlessness and openness in discussing Yahoo’s failures and her forward-looking confidence on the eve of the large-scale strategic layoffs finally announced today.

In spite of that newfound confidence, however, there are some who think that Yahoo should never have tried to be a media company.

“Yahoo was Jerry Yang’s baby. He did a great job creating the baby,” said Masayoshi Son, President and CEO of SoftBank. “Unfortunately, some of the key executives after the foundation of the company couldn’t keep up with the technology innovation of the industry. They thought that Yahoo should become a media company.”

“I said from the very beginning, ‘Yahoo should position itself as a technology innovation company, not as a media company.’ ”

As founder and head of SoftBank, a massive Japanese telecommunications company and stakeholder in Yahoo Japan, Son’s opinion actually matters. Moving past the current round of layoffs, Yahoo’s next expected move is to sacrifice key assets in Asia in order to refocus the company’s efforts in an area with the potential for growth.

The past few years have not been favorable to Yahoo or its employees, but 2011 is a new year.

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