Yahoo Layoffs Set for December 10 (And, No, Jerry Yang Is Not Leaving Too)
While they’re not as significant as the potential 6,000 layoffs at Sun Microsystems (JAVA) announced earlier today, several sources at Yahoo said that the previously announced layoffs at the Internet giant are set to take effect on Dec. 10.
Yahoo (YHOO) confirmed it would cut its workforce by “at least” 10 percent of its global workforce–or about 1,400 to 1,500–on Oct. 21, as part of its third-quarter earnings call. But it did not give an exact date for the action.
That 10 percent figure is still the number being cut, said sources, although the company–as all tech outfits suffering in the current economic meltdown–could be forced to make more reductions if the outlook worsens.
That’s not likely for now, but such a large cut will still have a major impact at the company, which has not had to make a lot of cutbacks over its history.
Thus, not such happy holidays at Yahoo’s Sunnyvale, Calif., HQ.
But someone who is not leaving–at least not quite yet, despite the persistent rumors over the last week–is Yahoo CEO Jerry Yang.
As Yahoo’s share has dropped this week to $10 a share, a spate of rumors swirled inside and outside the company about the fate of Yang, and also President Sue Decker.
But sources said that neither is leaving the company at this point and both are focused on ongoing plans to improve its fortunes. That includes a possible deal to merge with Time Warner online unit AOL.
Talks about a merger have been ongoing, but the pair are still far apart on price. Sources at both companies said Time Warner (TWX) wants $6 billion for AOL, while Yahoo wants to pay a little more than half that, in the $4 billion range.
Price is a bigger issue than ever, since Yahoo’s market valuation has dropped so significantly and the deal would involve Time Warner getting a percentage of the combined company.
That said, if the pair can come to terms on price, having done a lot of due diligence already, with AOL and Yahoo execs involved in extensive meetings, Yang could bring a deal to the board by next week.
If combined, of course, there would be more layoffs in the consolidation of the pair.
But, for now, that will just be limited to Yahoo.
In an interview with BoomTown a few weeks ago, Yang said about the cuts:
We want to do it before the holidays, which is why we wanted to let people know that it would affect 10 percent [of Yahoo’s workforce]. But we also want to make sure that we are cutting to be more effective and not cutting for cutting’s sake.
We have been growing costs for the last few years while we were investing in new products and platforms, and we have also made a lot of acquisitions and additions. There have been redundancies and geo-consolidation that we had not addressed that we are doing now. I know that sounds generic, but doing this is really important.
I look at these cuts as both a short-term and long-term effort. In the short term, we have consolidation and organizational corrections to make. In the long term, we will look at our whole portfolio and are now asking ourselves in each case if we need to be in this business.
We’re asking ourselves–should we sell it or should we shut it down? That is the kind of comprehensive look we are doing across the company.”
In other words, more changes to come for Yahoo.