Yahoo set to cut staff by 14%
Source: Agencies |
April 6, 2012, Friday
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Print Edition
Print Edition
YAHOO! Inc will lay off 2,000 people, or 14 percent of its workforce, in its deepest round of job cuts in years as new Chief Executive Scott Thompson tries to jump-start growth with a leaner, more agile company while saving hundreds of millions of dollars.
Sunnyvale, California-based Yahoo, which ended 2011 with some 14,000 employees, has said it would save US$375 million annually from the cuts and incur a pre-tax cash charge in the second quarter of US$125 million to US$145 million.
The company declined to comment on severance details.
Some analysts were skeptical about the widely expected layoffs, which weren't accompanied by details of Yahoo's broader plan to revamp its business.
"You can't cut your way to revenue growth," said Colin Gillis of BGC Partners. "What people want to see out of Yahoo is ... a plan and provision for revenue growth."
Third Point, an activist hedge fund that is waging a proxy fight to install a slate of handpicked directors on Yahoo's board, described the layoffs as "necessary."
But the hedge fund, Yahoo's largest shareholder with a 5.8 percent stake, said in a statement that it was "disappointed that this round of cuts occurred before CEO Scott Thompson has articulated his strategic plan for the company."
The layoffs come as Yahoo's revenue declines due to competition from Google and Facebook.
Sunnyvale, California-based Yahoo, which ended 2011 with some 14,000 employees, has said it would save US$375 million annually from the cuts and incur a pre-tax cash charge in the second quarter of US$125 million to US$145 million.
The company declined to comment on severance details.
Some analysts were skeptical about the widely expected layoffs, which weren't accompanied by details of Yahoo's broader plan to revamp its business.
"You can't cut your way to revenue growth," said Colin Gillis of BGC Partners. "What people want to see out of Yahoo is ... a plan and provision for revenue growth."
Third Point, an activist hedge fund that is waging a proxy fight to install a slate of handpicked directors on Yahoo's board, described the layoffs as "necessary."
But the hedge fund, Yahoo's largest shareholder with a 5.8 percent stake, said in a statement that it was "disappointed that this round of cuts occurred before CEO Scott Thompson has articulated his strategic plan for the company."
The layoffs come as Yahoo's revenue declines due to competition from Google and Facebook.
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