October 20th, 2008
No surprise. Yahoo expected to announce layoffs
Word leaked out over the weekend that Yahoo is planning layoffs when it reports quarterly earnings on Tuesday afternoon. The exact number of jobs affected is unknown, thought sources told the San Jose Mercury News and Wall Street Journal that it would likely be more than 1,000. The job cuts reportedly would come from across the company.
The news shouldn’t come as any surprise. Last month - on Sept. 24, to be exact - Yahoo said it hired Bain & Co. to help “streamline our processes.” The company said at the time that it didn’t necessarily mean layoffs but the headlines immediately wanted to know when, not if, the layoffs would come.
How quickly the landscape can change, though. That wasn’t 30 days ago and since then:
- The House of Representatives failed to pass a bailout bill and caused the Dow to plunge a record 777 points on the news.
- eBay, following on the heels of the slashing of 25,000 jobs at HP, announced a 10 percent workforce reduction for the online auction company.
- Yahoo shares have fallen more than 32 percent since the Sept. 24 closing price of $19.15. Shares closed Friday at $12.90.
- A Yahoo-Google ad deal has been put on hold while Washington regulators put it under a closer watch. Could Google be ready to walk?
- Microsoft CEO Steve Ballmer said at the Gartner Symposium ITxpo last week that Yahoo and Microsoft could still develop a search partnership but that Microsoft is not considering a full acquisition of Yahoo. Earlier this year, Yahoo! rejected Microsoft’s takeover offer of $45 billion, or $31 a share.
Yes, things are tough all over, right? But things look really bad at Yahoo. It wasn’t that long ago that investor Carl Icahn agreed to take a few seats on the Yahoo board in exchange for dropping a proxy fight over control of the company. Maybe he should have stuck with the fight and cleaned house. Newsweek’s Dan Lyons asked a question this weekend that I was just asking myself: Why is Jerry Yang still in charge?
Maybe his will be one of the jobs that’s cut this week.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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