San Francisco — Walking a tightrope in the midst of economic downturn, dodging every obstacles while attempting to achieve stability, the struggling Internet powerhouse, Yahoo Inc. is planning its third major round of job cuts in 14 months, and the first since Carol Bartz became chief executive in January, which could affect several hundred employees, The Wall Street Journal and The New York Times reported.
The layoffs could make a severe blow to several hundred employees company-wide on top of 2,400 jobs trimmed last year. The layoffs could be announced as early as next Tuesday, when Yahoo reports its first-quarter financial results, according to the source familiar with the matter, who wished to remain anonymous because of the issue’s sensitivity.
A Yahoo spokesman, Brad Williams, declined to comment, citing a company policy not to discuss rumors and speculation. The New York Times reported that Yahoo was planning layoffs on its Web site Tuesday evening.
The Sunnyvale, Calif., Internet pioneer has trimmed down its staff several times in less than two years to compensate for slower growth, followed by the deepening impact of the recession.
Yahoo, which has been facing turbulent times for more than two years, laid off about 1,000 workers early in December 2008, under former CEO and co-founder Jerry Yang. The company, which is the No. 2 U.S. Internet search provider, finished 2008 with roughly 13,600 employees, down by more than 1,600 employees from the third quarter of 2008, in continuing efforts to prune its sprawling online business and bring down expenses.
The newspapers said the layoffs, which would be the first since Carol Bartz took over in January as chief executive of the Internet company, could be announced by next week, when Yahoo! reports its quarterly earnings.
In recent years, Yahoo has witnessed pretty slow growth, in addition to losing ground to Google in online search. Regardless of its vast online audience of roughly 500 million people worldwide, it also missed the opportunity to acquire fast growing social Web sites, like YouTube or Facebook, which have become a magnet, especially with younger users.
And its display advertising business, which is focused on high-priced ads, has been undercut by the proliferation of sites that offer marketers a way to reach audiences at lower prices. The company has endured from a constant departure of executives and a series of revampings that have damaged employee morale.
The layoffs would come almost two months after Bartz carried out a broad internal management reorganization and as Yahoo explores partnerships to help revive its growth.
“If you look at the changing economic environment and the changing leadership, it is not surprising that you would see further cuts at the company,” said Scott Kessler, a stock analyst with Standard & Poor’s.
Under Bartz, Yahoo has shut down its FareChase travel engine and online-storage service that it does not consider important to its mission. The New York Times also reported that the company is now also shopping around for Hotjobs, its jobs site.
Yahoo and Microsoft Corp. met lately to discuss a deal involving the company’s search business, according to a source familiar with the matter on condition of anonymity.