Sunnyvale,California — Yahoo Inc., the beleaguered Web portal is on the brink of slashing between 600 and 650 jobs, or about 5% of its workforce as early as today, in the latest bid by chief executive Carol Bartz to reduce costs and reposition the company in faster-growing markets, according to people familiar with knowledge of the situation.
The layoffs comes as the company strives to reduce costs amid sluggish growth in Yahoo’s online advertising business as the struggling Internet media giant attempts to streamline a multi-year turnaround effort under Bartz. These would be the latest in a series of purges at the Sunnyvale, Calif., company over the last few years.
Kim Rubey, a Yahoo spokeswoman, based in Sunnyvale, Calif., refused to comment to the New York Times, which cited sources with knowledge of the situation.
It matters a great deal to the unfortunate workers influenced by the cutbacks this week are set to receive notifications starting on Tuesday, according to a person familiar with the plan.
The job cuts, which have been under review for some weeks, mark the first company-wide layoffs in 18 months, and accentuate the difficulties Ms Bartz has had in rekindling growth at the US internet company. She eliminated a similar proportion of jobs in 2008, soon after joining the company.
Yahoo’s product units are expected to take a lot of burnt, which designs and builds Web properties like the company’s popular news, sports and finance pages, as well as its widely used email service, largely supported by advertising, and are part of an effort to refocus development efforts on new markets with the greatest potential for growth, according to the person familiar with the plan. The group, which recently had about 7,000 employees, is run by chief products officer Blake Irving, a former Microsoft Corp. executive who joined Yahoo in April.
Yahoo had 14,100 employees at of the end of October. Bartz, the tough-minded chief executive at Yahoo, has been trying to reinforce Yahoo, which has suffered from years of excessive bureaucracy and lack of innovation. But she is still continuously hit with questions such as “What is Yahoo?” as posted by Web 2.0 Summit host John Battelle.
Bartz vigorously replied at the event in November that Yahoo’s focused on five areas: “content, communications, media, technology and innovation.” How any company can compete in five distinct areas of business is a little vague, and that is part of why the stock has not been doing that well. The company failed to capitalize on social networking — a niche now dominated by Facebook — and lost its battle with Google in search. Investors feel that Yahoo is treading water while rivals such as Google and Facebook are racing ahead in growth.
To cut costs, Bartz handed over Yahoo’s search engine and related advertising system to one-time rival Microsoft. It remains a large player in display advertising, catering something on the tune of 18 billion ads per day. She also teamed with third parties to handle Yahoo’s dating, job listings and real estate area. Meanwhile, . Bartz has tried to build on Yahoo’s strengths by adding editorial staff to its media properties and inviting amateurs to contribute news articles.
Despite having made numerous investments in a range of mobile internet services, Yahoo has seen rival Google seize the initiative, mainly in part to its success with the Android mobile operating system. Investors are intensifying pressure on Bartz, who took charge of Yahoo nearly two years ago, to show results. But she has repeatedly said that it will take some time before the company makes significant progress.
Layoffs at Yahoo would stand in crude contrast to other Internet companies, including Google Inc., Facebook Inc., which are competing fiercely with each other to hire top-notch engineers. At Yahoo, those let go will be notified soon and will likely have to leave Yahoo facilities immediately. Company sources said the action will be completed by early afternoon, Pacific time.
It is bad enough to lose a well-paying job in this still-tough economy, but to lose one over the holidays is certainly a bad timing for Yahoo, given it is less than two weeks until Christmas, but cost-cutting measures at the company seems unavoidable as it seeks to improve revenue and spur growth.
And on the face of it, Google last month informed its more than 23,000 employees they would get a 10% pay raise in January. Still, it is another sad day in Sunnyvale, Calif., where the iconic Internet giant is headquartered.