Yahoo dumping 2,000 workers in latest purge
SAN FRANCISCO (KGO) -- Sobering news came out of Silicon Valley Wednesday where Sunnyvale-based Yahoo announced 2,000 layoffs, about 14 percent of its workforce. Yahoo stock dove when the job cuts were first announced but by the end of trading, it closed up 9 cents at $15.27.
Yahoo is profitable, but it is falling behind Facebook and Google in online advertising. So, it is vowing to become smaller and nimbler as it cuts 14 percent of its workforce. The timing of the layoffs is puzzling because Yahoo's new CEO, Scott Thompson, will not give out details about the future until it reports quarterly earnings in two weeks.
Analysts are not sure if he has a plan or if he is preparing to sell Yahoo. "If you're going to do it properly, you do it deep and fast. This looks shallow and long, so it does look like he may be learning on the job here. And by the way, if you're doing layoffs for packaging for sale, you also want to go very deep because you want to make the company look as good as possible as quickly as possible," technology analyst Rob Enderle explained.
Yahoo says the 2,000 layoffs will equal a savings of $375 million yearly after severance and other related expenses. That money could go toward new products or services. Finance professor Robert Hendershott at Santa Clara University says Yahoo will be under pressure to innovate. "No, you do not slash yourself back to growth and relevance. You need to re-invent yourself. Now, that doesn't mean that this is a bad move because to re-invent yourself, you need resources. You need to change things dramatically within the company," he said.
Yahoo has hundreds of job openings posted on the LinkedIn website, which may be a clue to its future plans in content and cloud services. "They've been an icon and they've been something people recognize throughout the world as a leader and innovator in their industry. You would hate to see something like that go away," said Silicon valley resident Wayne Diamond.
A tech industry recruiter told ABC7 that he expects most of the 2,000 layoff casualties should be able to find jobs within three months, especially if they are product or marketing managers.
yahoo, layoff, business, david louie
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