Many Yahoo employees are going to get an undesirably long Easter break. Today the company confirmed the circulating rumors that approximately 2,000 people will lose their jobs.
Most will have their positions eliminated, although some will undergo what Yahoo CEO Scott Thompson called an undefined “phased transition.”
Yahoo expects to save about $375 million annually once the dust settles. Most of that dust will show up as a $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. According to the BBC News, the layoffs account for 14 percent of Yahoo’s workforce and mark the sixth time in four years that the company has made significant staff reductions.
Today’s action was first confirmed by AllThingsD, which said further layoffs are also in the works.
Thompson said the “tough decision” was necessary to make Yahoo “smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require.”
The cuts will not be across the board, and sources report the company is hiring in some areas. Thompson alluded to this when he said, “Yahoo intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win.”
The activist shareholders have not yet posted a reaction on their website, ValueYahoo, where they explain their proposal to elect a “Shareholder Slate” comprised of Daniel Loeb, Harry Wilson, Michael Wol and Jeff Zucker to the Yahoo board.
Check Yahoo’s latest price (YHOO) here.
Yahoo – statement
ValueYahoo – http://valueyahoo.com
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