Yahoo Cuts 1,000 Jobs

In one of the biggest downsizings since the bust Yahoo has announced plans to lay off about 1000 of it’s 14,300 employees. “The Sunnyvale-based company disclosed the upcoming 7 percent reduction in its 14,300-employee work force Tuesday while reviewing a 23 percent drop in fourth-quarter profit and a cautious 2008 outlook. The bad news sent Yahoo shares skidding to their lowest levels in more than four years.

In a prepared statement, Yahoo Chief Executive Jerry Yang warned of looming ‘headwinds,’ indicating that the company’s tortuous turnaround efforts aren’t likely to pay off this year.

‘I’m surprised by how slowly they seem to be moving,’ said Cantor Fitzgerald analyst Derek Brown. ‘Yahoo still has quite a bit of work ahead.’

Yahoo shares dropped $2.09, or more than 10 percent, in extended trading Tuesday after finishing the regular session at $20.81, up 3 cents. The company’s market value has plunged more than 50 percent since the end of 2005, wiping out $35 billion in shareholder wealth.

Yang, Yahoo’s co-founder, took over as CEO seven months ago in an attempt to shake things up, but his overhaul hasn’t impressed Wall Street so far. The mass firings represent Yang’s most dramatic move yet.

‘This is a necessary step in our transformation,’ Yang said during the conference call.

Yahoo didn’t specify which areas of its operations will be trimmed in the company’s biggest purge since jettisoning 650 workers in the aftermath of the dot-com bust seven years ago. Management indicated some employees whose current jobs are eliminated may be offered new assignments in other parts of the company. Further details are supposed to be released by mid-February.”

I have no idea which departments they’re talking about cutting but I personally feel Yahoo! isn’t doing enough to innovate anymore and should be trying a lot harder to lead the pack.