Yahoo Updates: Looking to Cut Close to 1,000 Jobs

YHOO: Yahoo! logo

Yahoo’s (NASDAQ:YHOO) problems are just getting bigger, with the company mulling up to 1,000 job cuts. [1] The company has consistently lost market share in both search and display ad markets owing to Google (NASDAQ:GOOG) and Facebook, and the layoffs seem to be part of CEO Scott Thompson’s desperate attempt to control costs and turn around the once Internet darling.

Layoffs Necessary For a Turnaround?

The 1,000 layoffs, if they happen, would comprise almost 7% of Yahoo’s total workforce. However, in retrospect, a move like this was fairly expected as part of Thompson’s turn-around process. Weak businesses within Yahoo are bound to be overhauled or cut our entirely, especially as the company shifts its focus to mobile and social tools.

Additionally, Yahoo is already facing defections as high level engineers and business unit leaders are leaving the firm, something we discussed in Will a Brain Drain Hinder Yahoo’s Recovery?

We have a revised price estimate of $18 for Yahoo’s stock, which is roughly 25% above the current market price.

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  2. Yahoo Earnings: Revenue Decline Continues As Deal For Core Business Closes In June
  3. Yahoo Earnings Preview: Revenue Set To Decline As Slide In Ad Revenues Continues
  4. Yahoo Earnings: Slide In Core Advertising Derails Revenue Growth Once Again
  5. Should Verizon Continue To Pursue The Yahoo Deal?
  6. Yahoo Earnings: Search And Display Revenue Growth Continues To Elude The Company

See our full analysis for Yahoo’s stock here

  1. Yahoo’s New CEO Preps Major Restructuring, Including Significant Layoffs, AllThingsD, 5th March 2012 []