Yahoo to lay off 2,000 employees

Yahoo has been under its new CEO Scott Thompson for just a few months but today Thompson and the leadership of the troubled Internet company made some big cuts in Yahoo's workforce as a precursor for more changes. In a press release today, Yahoo confirmed earlier Internet rumors that it will lay off about 2,000 workers.

The amount of employees affected by these cuts represent about 14 percent of Yahoo's 14,000 total workers. Yahoo says that the layoffs will save the company about $375 million a year. However, it added that Yahoo will also take a one-time cash charge of between $125 million to $145 million in order to cover the severance packages for the laid off workers.

Yahoo added that going forward, it plans to focus its business on "a select group of core businesses". More information about Yahoo's new direction will be revealed on April 17th when the company also announces its latest quarterly financial results.

There are rumors that Yahoo is looking to make some changes in its partnership with Microsoft, specifically in its search deal where Microsoft's Bing technology is used to power Yahoo's search engine. Yahoo is also going after Facebook with claims that the company has violated a number of its patents.

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11 Comments

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Phouchg said,
Reducing headcount to focus on their core competencies. Of which, I'm afraid, there are none left. None at all.

Yeah, that's what I was thinking too. What could they possibly be focusing on?

Cutting 2000 workers will save $375 million? That's $187k salary average! Wow, I wonder what kind of positions they're talking about here.

Not quite, you have to account for overhead per employee which is ~20% of salary+office rent/utl/internet/software: salary <100k per head

bdsams said,
Not quite, you have to account for overhead per employee which is ~20% of salary+office rent/utl/internet/software: salary <100k per head

Too bad some couldn't be offered to work from home or take a salary cut, I just don't get Yahoo, I always learn about what great stuff they have AFTER they die.

bdsams said,
Not quite, you have to account for overhead per employee which is ~20% of salary+office rent/utl/internet/software: salary <100k per head

That's still a nice amount of money. Usually they'd cut the "non essential" employees, so a 6 figure salary for that is pretty nice. I'm going to apply to be their coffee and donut director.

This is only a temporary solution for Yahoo's problems. Hopefully with the money they are 'saving' they can do something else positive for themselves.