Yahoo Inc. To Cut Hundreds of Employees

January 23, 2008

(Long Island, N.Y.) In a cost cutting clean-up Yahoo Inc. announced that it will cut hundreds of employees off of its payroll by next month. The exact number was still undetermined as Yahoo chairman and Co-founder Jerry Yang announced that the company is still seeking the advice of the board members to settle on an exact number.

If this plan pushes through, this would be the biggest cleaning out the company has undergone since its inception in the industry and their initial success. This comes in the wake of investors requesting the company do more to help boost the declining price of shares of stocks investors have experienced the last two years.

Experts conclude however that the company will probably cut 5% off of its current 14,000 employees which would result to 700 people nationwide losing their jobs by next month. A number of investors criticized Yang for being too soft in making tough decisions for the company that would have reversed its current failures in an earlier time. Standard and Poor 500 equity analyst Scott Kessler said: “A lot of what drives the market comes down to perception and, rightly or wrongly, there is a perception that Yahoo needs to be repaired,” Kessler said. “To gain credibility, you need to make hard choices like this.”

To encourage its investors, Yahoo stated in a conference call of a multi-year plan aimed at transforming the company and enriching the long-term company stocks holder. “Yahoo plans to invest in some areas, reduce emphasis in others and eliminate some areas of the business that don’t support the company’s priorities,” the statement said.

On Wall Street, Yahoo stocks fell almost 28 percent since Yang replaced Terry Cemel as CEO of the company last June. Yahoo shares per stock also fell to a year low at $19.92 on Tuesday down by 4.14 percent. The company’s troubles could be due to several factors including the ascension of Google as the primary internet search engine site and years of misguided management of the company.

Posted by News LI Editor · Edited by Brianna - Filed Under Business