Yahoo Lays Off 14 Percent of Workforce

by Jordan Richardson on April 5, 2012

Yahoo continues to find itself in the news and this time it’s a swath of layoffs that’s getting the company some press.

Yahoo announced the cuts Wednesday and will lay off 2,000 employees – roughly 14 percent of the company’s 14,100-strong workforce. Yahoo has estimated that the cuts will save it $375 million per year, after, of course, the $125 to $145 million that will need to be set aside for severance packages.

These layoffs come as Yahoo struggles to redefine itself in a changing tech marketplace. CEO Scott Thompson’s sweep of the job pool is the sixth mass layoff in the last four years for the company. During that time, Yahoo has gone through three different CEOs. This cut, however, is the most significant, beating out the 2008 round of cuts that saw 1,800 workers lose their jobs to Yahoo’s streamlining mechanism.

The end results of such layoffs usually make for short-term positives, like when the previous layoffs boosted earnings. Revenue wasn’t remedied, though, and Yahoo’s slide continued inevitably. Without more changes that impact what Yahoo introduces to consumers, history is bound to repeat itself as this round of workers are presented with their pink slips.

That’s not to say that Thompson is without a plan, mind you. The new CEO plans to focus on Yahoo’s strengths, which may or may not include patent litigation as a way to drum up some quick cash. The company also wants to hone in on selling advertising and it’s been tinkering around with the process through which personal information is collected from its users.

Yahoo is also planning to work more with Right Media, a company is acquired outright in 2007. This is essentially a service that will help Yahoo place advertisements all over the Internet. If Right Media is adopted under the Yahoo umbrella, the result could be more layoffs as the corporation trims its marketing department.

“We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities,” Thompson said of the layoffs. “Our goal is to get back to our core purpose – putting our users and advertisers first – and we are moving aggressively to achieve that goal.”

On April 17, Yahoo will release its first quarter results. More information about the company’s plans is expected then.

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