Thursday, 23 October 2008

Yahoo Reports Disappointing Q3 Financials, Slashes Jobs Again

Internet search engine bellwether Yahoo Tuesday released disappointing third-quarter financials, reporting a mere one percent year-on-year increase in revenue and also caused shock waves when it announced that it plans to lay off at least 10% of its staff over the next few months to keep afloat...

Internet search engine bellwether Yahoo Tuesday released disappointing third-quarter financials, reporting a mere one percent year-on-year increase in revenue and also caused shock waves when it announced that it plans to lay off at least 10% of its staff over the next few months to keep afloat as the economic crisis deepens.

This will be Yahoo's second round of layoffs in nine months. It slashed some 1,000 jobs earlier this year in January and whilst it has not revealed when the second round will take place; Yahoo did confirm that it will see at least 1,500 employees lose their jobs.

Yahoo hopes that by doing so, it will be able to save approximately 400 million dollars a year.

"As economic conditions and on-line advertising softened in the third quarter, we remained highly focused on our 2008 strategy to invest in initiatives that enhance not only our long term competitiveness, but also our ability to deliver for users and advertisers in this more difficult climate. We have been disciplined about balancing investments with cost management all year, and have now set in motion initiatives to reduce costs and enhance productivity," said Jerry Yang, co-founder and chief executive officer, Yahoo! Inc in a statement released to the media.

"The steps we are taking this quarter should deliver not only near-term benefits to operating cash flow, but should also substantially enhance the nimbleness and flexibility with which we compete over the long term.”

Analysts say the layoffs will do little to solve Yahoo’s bigger problems and expect Yang to emerge with a new business strategy to boost Yahoo's share price.