Yahoo! To Axe 1500 More Jobs
Yahoo! To Axe 1500 More JobsOct 22 2008 - Business - Farhad Divecha
Gloomy forecasts and plummeting bottom lines have led to the once giant of online advertising and search to announce 1,500 more job cuts this year, bringing the total to 2,500 employee lay-offs.
Yahoo! announced their quarterly earnings yesterday. Profits dropped 64% compared to the same period last year, which was in line with analysts’ expectations. Revenues were up a bit, but the total forecast for 2008 had to be reduced.
The 10% reduction in jobs should help the company control costs and therefore increase profitability. The news was welcomed by Wall Street, as the Yahoo! stock rose in after-hours trading following the earnings announcement.
Rumours about the lay-offs were circulating since last week. Speculation arose that employees would not be offered anything more than the basic government-mandated severence package. Employee morale in the company has fallen once again this year, with the common sentiment among employees seeming to be “why bother?”
Chief Financial Officer Blake Jorgensen said the company is conserving cash, “to allow us to do some of the things we may be looking at.” This statement has fuelled further speculation that the possibility of Yahoo! acquiring AOL might actually be more than just an idle rumour.
Behind all the uncertainty, one thought is ever-present in all investors’ minds – Yahoo! should have taken Microsoft’s offer earlier this year, and run! With share prices at a five-year low at around $12.00, with little hope of returning to even $20, the $31 per share offer from Microsoft seems like a generous gift that they turned down.
Jerry Yang is definitely not the favourite person in many peoples’ books at present. Investors, employees and users on a number of online message boards and blogs are calling for his resignation and wondering if he will leave with the same severance package (or lack thereof) as the other unfortunate employees.