Yahoo has announced it will cut 2000 jobs as the struggling
Sunnyvale, California company attempts to focus on what its
new chief executive called a smaller number of "core
"Today's actions are an important next step toward a bold,
new Yahoo - smaller, nimbler, more profitable and better
equipped to innovate as fast as our customers and our
industry require," chief executive Scott Thompson said in a
The layoffs represent about 14 percent of the company's
full-time workforce of 14,100, not including contract
workers. The cuts will be Yahoo's biggest in recent years,
surpassing a layoff of 1500 people that Yahoo made shortly
after the last recession began in 2008.
When approached as they were pulling into the Yahoo
headquarters in Sunnyvale, employees declined to comment
about the layoffs. Security personnel could be seen
patrolling the parking lots as reporters gathered outside.
Thompson has previously said he planned to make significant
changes at the company, where he was named whief executive in
January after previous chief executive Carol Bartz was fired
for failing in her own effort to turn the business around.
Yahoo has some of the most popular websites in the world,
with nearly 700 million users. But while the company is still
profitable, it has seen revenue and profit decline as it has
lost share of the online advertising market to newer
companies like Google and Facebook.
"We are intensifying our efforts on our core businesses and
redeploying resources to our most urgent priorities. 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," Thompson added in the statement.
The company did not indicate where the cuts will be made, but
said they are part of a plan to refocus the company on "a
select group of core businesses, the platforms that support
those core businesses and the data that drives deep
personalisation for users" as well as advertisers.
Analysts have said at least some of the cuts will likely hit
Yahoo's staff in Silicon Valley. While the company does not
provide information on the number of employees in specific
locations, in the past nearly a third of its workforce has
been based at Yahoo's Sunnyvale campus.
In the statement, Yahoo said it expects to save $US375
million a year by making the job cuts, while incurring
one-time charges of $US125 million to $US145 million for
severance and other costs.
Several tech industry blogs have reported in recent days that
this week's layoffs may only be the first wave of broader
cuts to come, but Yahoo did not confirm that Wednesday.
Yahoo said it began notifying employees if they are affected
by "job elimination or phased transition."
"Over the last 60 days, we've fundamentally re-thought every
part of our business and we will continue to actively
consider all options, that allow Yahoo to put maximum effort
where we can succeed," Thompson said in a memo that announced
the job cuts to employees.
"Unfortunately, reaching that goal requires the tough
decision to eliminate jobs, which means losing colleagues and
parting with friends," the memo said, adding that the
affected employees would be treated with "dignity and
Thompson, who previously ran the PayPal division of eBay, has
been under pressure to come up with a plan for turning Yahoo
The company's biggest shareholder, activist investor Daniel
Loeb, has recently mounted a proxy challenge to replace board
members whom Loeb has faulted for steering the company into
its current decline.
In addition to the internal reorganisation, Yahoo has engaged
in discussions to sell its holdings in two profitable Asian
Internet companies, although those talks were reported to
have stalled earlier this year.
Meanwhile, Thompson has also launched a controversial legal
challenge to Facebook, in which Yahoo is demanding that the
popular social networking service pay licensing fees for
using technology that Yahoo claims is covered by its patents.
Facebook responded to that lawsuit this week by denying the
claims and alleging that Yahoo should pay for using software
tools that Facebook has patented.