Yahoo plans cost-cutting moves, layoffs
Yahoo is expected to announce cost-cutting moves this week, including another round of layoffs, according to a report Sunday in the Wall Street Journal.
The exact number of layoffs is unknown, but job cuts are expected to come from all departments in the 14,300-employee company, according to the report. Yahoo, which announces its third-quarter earnings on Tuesday, has reportedly asked managers to identify areas where the company can achieve operating budget reductions of 15 percent. In January, Yahoo laid off an estimated 1,100 employees in a bid to cut costs and trim operations that weren't performing as well as others.
Rumors of layoffs at Yahoo have been circulating for weeks, with Alley Insider's Henry Blodget calling for the elimination of 3,000 jobs at the company.
However, Yahoo's stock has been under tremendous pressure lately, closing at $12.90 on Friday. Just a week before that, the Internet giant's stock traded as low as $11.37, its lowest price since March 2003. Yahoo, as a result, also now has a market cap of $17.88 billion. Last May, Microsoft walked away from its buyout offer of $47.5 billion to snap up all of Yahoo, only later to return with a partial buyout offer of $9 billion to acquire just the company's search assets.
Indeed, my colleague Dawn Kawamoto cited the company's declining stock price as a chief reason Yahoo executives should be nervous about their company's future.
No doubt, most tech companies are getting pummeled on Wall Street, but Yahoo's drop has to be particularly galling, given how much more Microsoft was willing to pay for the company.
Yahoo's stock price got a goose on Thursday after Microsoft CEO Steve Ballmer noted Yahoo's declining stock price in saying that a takeover of the Internet search pioneer still made sense, putting even more pressure on Yahoo executives.
Although Yahoo's shares continue to give up ground, the company's stock performance during recent trading sessions has largely mirrored the broader markets. Indeed, many tech companies have resorted to layoffs recently to stem their financial losses.
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