La Vista, Nebraska -- In a move that has left many fretting their brains, Yahoo Inc. on Friday unveiled plans to build two new office facilities in Nebraska -- just three days after the California-based Internet company reported a whopping 64 percent plunge in third quarter net income and a reduction of at least 1,500 workers in order to cut costs as it deals with the economic downturn.
Gov. Dave Heineman and corporate officials announced that Yahoo! has chosen Nebraska as the place of two new developments. A 150,000 square ft. Yahoo! Data Center will be located in LaVista. A Yahoo! Customer Care Center will be located in Omaha.
“I am delighted to welcome Yahoo! to Nebraska,” Gov. Heineman said. “These two projects present an extraordinary opportunity for Nebraska. It leaves no doubt that Nebraska can successfully compete for technology jobs.”
“In addition to the La Vista data center, I’m pleased to state that Yahoo will be building a customer-care center in west Omaha,” he said at a press conference this morning at the Embassy Suites Hotel in La Vista.
A customer-care center essentially is a “help desk” for customers; employees take inbound phone calls and handle account issues.
According to The Omaha World-Herald, Yahoo is planning to make an investment of $100 million in the LaVista site. The papers said that the company was not yet sure how many Cornhuskers it will employ, but is expected to initially hire 50 people who will earn an average salary of $50,000 to $60,000 working at the La Vista center.
At the beginning of this year, Sunnyvale, Calif.-based Yahoo applied for state tax breaks available in Nebraska to help build some operations in La Vista. The customer service center will be in west Omaha, probably at the First National Bank business park near Boys Town.
Heineman said that Yahoo reps started selecting sites in January with the goal of locating in the Midwest, and that he and other economic development officials made a case for Nebraska.
Kevin Timmons, vice president of operations for Yahoo!, said, “We are very delighted to be partnering with the state of Nebraska to build this new data center. Yahoo! builds and operates some of the industry’s most efficient data centers and the expansion of our operations with this new facility will help Yahoo! to better serve our worldwide audience of 500 million users.”
As a result of the incentives it will receive, within four years it will have to invest at least $100 million and create at least 50 jobs with a minimum average salary of $68,700. In return, it will receive benefits including sales tax refunds on capital purchases and some property and payroll tax breaks.
Other factors include the availability of job training assistance, abundant fiber optic providers, low-cost utility rates, and a growing information technology-oriented workforce.
Yahoo’s data center operations will be located in the former Tender Heart Treasures building at 10917 Harry Watanabe Parkway. The company purchased the building in September for $14.8 million. The 300,000-square-foot building sits on 24.3 acres near 108th Street and Giles Road.
The news of the new project comes on heels of an announcement Tuesday that Yahoo will cut 10 percent of its employees, or 1,500 people, citing a 64 percent drop in its third-quarter profit.
Asked about the introduction of new jobs while company employees were being let go, Timmons, said the company’s infrastructure needs continue to grow.
Both he and the governor characterized the Omaha and La Vista operations as “mission-critical facilities,” and Timmons said in the case of the data center, the jobs could not be outsourced.
A Yahoo spokesperson said that despite the company’s miseries -- which include an earlier layoff of 1,000 employees in February -- the company is “always seeking new ways to improve our infrastructure.” “It is clear to us that to effectively compete we needed to better aligning costs but continue to invest in our priorities -- our customers.”
Yahoo said it is gearing up for a forceful downturn well into 2009 by trimming $400 million from its annual expenses of $3.9 billion. Besides eliminating those 1,500 workers during the next two months, Yahoo may close some U.S. offices and assign more jobs to lower-paid contractors in other countries.