Yahoo to slash workforce as profits drop sharplyApril 22nd, 2009 - 1:05 pm ICT by IANS
By Arun Kumar
Washington, April 22 (IANS) Internet search company Yahoo Inc. announced plans to slash five percent of its workforce as it reported a first-quarter profit that fell sharply from a year earlier but still managed to beat Wall Street’s forecasts.
The layoffs will affect about 675 employees, the company announced Tuesday.
Yahoo said those being affected in this latest round of cuts would be notified within the next two weeks. Last year, the company cut about 700 jobs on a net basis.
Yahoo would not say exactly what kind of jobs would be lost but CNNMoney.com quoted Carol Bartz, the company’s new chief executive, as saying quite emphatically that the company’s current management structure is inefficient.
The layoff announcement came as the company reported its net income fell to $118 million, or eight cents per share, down 78 percent from a year earlier. Year ago results included significant one-time gains from an investment in Chinese Internet stock Alibaba.com.
Without the gains, and excluding one-time charges in the first quarter of 2009, Yahoo said it earned 15 cents per share, down 17 percent from a year ago.
Sales for the Sunnyvale, California-based company fell 13 percent to $1.6 billion. Excluding advertising sales that Yahoo shares with partners, the company reported revenue of $1.16 billion, just missing analysts’ forecasts of $1.2 billion.
“Yahoo! is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range,” said Bartz.
Yahoo has been actively trimming costs under Bartz, who replaced Yahoo co-founder Jerry Yang in January.
Yahoo offers scores of products, including e-mail, fantasy sports and personal ads, in addition to its search tool, but Bartz has pledged to create a leaner, stronger Yahoo that can better compete with rivals Google and Microsoft.
The company expects its cost reductions will help lift sales as soon as the second quarter, for which Yahoo is forecasting revenue between $1.425 billion and $1.625 billion.
That’s much higher than analysts’ expectations of $1.22 billion, and it would trump the $1.35 billion in sales from the second quarter of 2008.
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