2,000 workers to lose jobs in latest purge at Yahoo
SAN FRANCISCO— Yahoo is laying off 2,000 employees as new CEO Scott Thompson sweeps out jobs that don’t fit into his plans for turning around the beleaguered Internet company.
The cuts announced Wednesday represent about 14 per cent of the 14,100 workers employed by Yahoo.
The company estimated it will save about $375 million (U.S.) annually after the layoffs are completed later this year. Yahoo will absorb a pre-tax charge of $125 million to $145 million to account for severance payments. The charge will reduce Yahoo’s earnings in the current quarter.
The housecleaning marks Yahoo’s sixth mass layoff in the past four years under three different CEOS. This one will inflict the deepest cuts yet, eclipsing a cost-cutting spree that laid off 1,500 workers in late 2008 as Yahoo tried to cope with the Great Recession.
The previous purges under Yahoo co-founder Jerry Yang and his successor, Carol Bartz, boosted earnings. But trimming the payroll didn’t reverse a revenue slump. Thompson is betting Yahoo will be able to sell more advertising if it’s more astute in the analysis of the personal information that it collects from the roughly 700 million people who visit its website each month. Yahoo also has been exploring selling a service, called Right Media, that helps place ads around the Web. If a deal gets done, that would enable Yahoo to shed even more workers.