Yahoo Proceeds With Restructuring; Makes 2000 Employees Go Boohoo!

Yahoo Inc has started downsizing, and shall lay off about 14% of its total staff of 14000, but an insider believes that the cuts may go beyond the 14% estimate. The lay offs comprise many departments, including the marketing department and product group, mostly involved in the maintenance of new Yahoo websites and apps.

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Source: Internet

Chief Executive Scott Thompson stated that these layoffs shall benefit the company, transforming it in a smaller, nimbler, more profitable and better equipped to innovate at the rate desired by the customer. This shall acknowledge the main purpose of prioritizing the users and the advertisers first, and aggressive moves are being planned for the same, he added. With the sacking of about 2000 employees, an estimated annual savings of nearly $375 million shall be embraced by the company. Also, a pretax charge of about $125 million to $145 million in Q2 shall be incurred due to the cuts. More details shall be disclosed after the release of the Q1 results on 17th April.

The company passed no comments regarding the lay offs. And the analysts, clouded with their own doubts, are not particularly convinced with this 'sacking' move adopted by Yahoo. Colin Gillis of BGC Partners believes that downsizing is not the proper means to revenue growth, and that Yahoo should proceed along with a proper plan and provision for the same.

The employees were axed due to the declining revenue of the company in the middle of heavy competition from web giants Google and Facebook. Yahoo Inc. even finds itself fighting a proxy battle with hedge fund manager Daniel Loeb, whose company Third Point, with a 5.8 percent stake in Yahoo, is its largest stakeholder.