Yahoo Saving $375M by Eliminating 2,000 Workers
As part of a company restructuring, Yahoo is informing 2,000 workers of job eliminations and phased transitions.
As predicted, Yahoo announced on Wednesday that it's now notifying approximately 2,000 people of job eliminations or phased transitions. The layoffs are due to an internal restructuring that will ultimately simplify how Yahoo builds, launches and maintains many of its properties and products. Yahoo expects to realize approximately $375 million of annualized savings upon completion of all employee transitions.
"Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win," the company stated. "Yahoo! has identified key parts of the business -- a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers -- where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value."
Reports of changes within Yahoo surfaced earlier this week, claiming that executives were planning a major corporate reorganization that could lead to thousands of layoffs. Scott Thompson, CEO of Yahoo and former president of eBay's PayPal unit, was also reportedly making changes to get the company back on course and rebuild the empire. He took the Yahoo throne back in January, insisting that he would put the company's users and advertisers first.
Yahoo was once king of Search Engine Land before Google came along and stole the show. The former champ has seemingly struggled ever since, and even saw CEO Carol Bartz kicked out of the company last September. Since then, Yahoo co-founder Jerry Yang has hit the road along with board chairman Roy Bostock and three other directors. That said, a restructuring isn't all that surprising.
"Today's actions are an important next step toward a bold, new Yahoo! -- smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require," Thompson said. "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose -- putting our users and advertisers first -- and we are moving aggressively to achieve that goal. Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo!."
Despite falling behind Google and Facebook, Yahoo claims it has a foundation of nearly 700 million users and thousands of advertisers that engage with Yahoo properties regularly and trust the company with their data and their business. But will the restructuring and customer focus bring it back into a more positive light? One thing is for certain: the company needs to start things off right by cracking down on the spamming taking place on Yahoo Instant Messenger. It also doesn't need to produce another social network... there's plenty now as it is.