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Tuesday, 21 October 2008

Yahoo planning layoffs

WASHINGTON - YAHOO plans to announce significant cost cuts, including layoffs, possibly as early as Tuesday when the troubled Internet firm announces its third-quarter results, The Wall Street Journal reported on Monday.

The newspaper, citing 'people familiar with the matter,' said that the exact number of jobs to be cut was not clear but it would be more than the 1,000 jobs the Sunnyvale, California-based company announced it was cutting in Jan.

The newspaper said some managers in Yahoo, which had 14,300 employees as of the end of Jun, had been asked to identify operating budget cuts of around 15 per cent.

Yahoo has been losing ground on the Web to companies such as Google, MySpace and Facebook, and was the target earlier this year of a failed takeover bid by US software giant Microsoft.

Its share price has shed more than 40 per cent over the past three months and was trading on Monday at US$12.58 (S$18.60) .

In a bid to reverse its fortunes, Yahoo has rolled out several new products and entered into an advertising tie-up with Google but the deal has yet to receive a green light from US Justice Department anti-trust regulators.

The Wall Street Journal said Yahoo's board was also considering a deal with Time Warner Inc.'s AOL which would see AOL folded into Yahoo and with Time Warner taking a minority stake.

The weak economy has also hurt Yahoo as advertisers cut back on spending, the newspaper noted, adding that the cutbacks 'appear to be hitting Yahoo's business harder than some of its competitors.'

''Advertisers are reducing spending for display ads, the graphical ads that make up much of Yahoo's revenue, faster than other segments such as search ads, Google's stronghold,' The Wall Street Journal said.

Yahoo is to announce its third-quarter results on Tuesday after Wall Street ends trading for the day. -- AFP

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