Yahoo confirmed that it is laying off 2,000 employees in an effort to make the company “smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require.”
“We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. 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,” Scott Thompson, CEO of Yahoo, said in a statement issued by the company. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo.”
Through the layoffs, Yahoo expects to realize about $375 million of annual savings. Yahoo also plans to take a $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results, which it expects to report on April 17.
The layoffs may not be the last, but rather the first to support the restructuring efforts of Yahoo, according to various media reports. The company had 14,000 full-time employees before Wednesday’s announcement.
Yahoo’s waning influence has been the subject of speculations and reports for some time. The company fired CEO Carol Bartz last September and has since replaced her with Thompson, a former PayPal executive. Jerry Yang, Yahoo’s co-founder, also resigned from company’s board of directors lately. Since then, Yahoo has sued Facebook over patents and Facebook has countersued.
Yahoo’s stock was down about 0.5% at press time on the news. The next few months will likely be tumultuous ones at Yahoo. Analysts and investors, however, believe there is more to come, possibly in the form of additional job cuts, along with a broader restructuring plan that will focus the company, as it plans to get “smaller, nimbler,” and “more profitable.”
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