Yahoo! begins massive layoffs

December 10, 2008 8:39:12 PM PST
Silicon Valley giant Yahoo! is cutting jobs just two weeks before Christmas. Up to 1,500 employees are being called in by their managers to be told this will be their last day at Yahoo! It's all part of Yahoo!'s plan to slash its expenses by $400 million a year.

Sources told us that the conference rooms at the Yahoo! headquarters in Sunnyvale were booked all morning long and then employees were told in person that they no longer had a job.

The bad news came with a four-month severance package.

There is no easy time for layoffs but 1,500 pink slips, two weeks before Christmas, is hitting the Yahoo! campus hard.

"You enjoy working with some people and you think they are really good for the company and the team and then when you hear this news, it's really sad," said Yahoo! employee Umesh Rathody.

Yahoo! slashed10 percent of its workforce as part of an effort to cut $400 million in costs.

CEO Jerry Yang sent an e-mail to all Yahoo! saying in part: "Our difficult decision to let colleagues go reflects the changes we are having to make to better align costs with revenues -- something businesses in virtually every sector are having to do."

A San Francisco State University business professor who sold his last company to Oracle says Yahoo! is sliding fast.

"Google was started after Yahoo! and is now many times the size of Yahoo! and now time for Yahoo! to partner up to survive," said business professor Jon Fisher.

One of Yahoo!'s largest shareholders is pushing a deal for Microsoft to acquire Yahoo!'s search engine and Yahoo! would keep 80 percent of the revenue generated by search queries on its own site.

That effort backed by Ivory Investment Management is still in the rumor stage, as Yahoo! employees face a much harsher reality.

"I don't have many comments. It really hurts when my friends call me up to actually say their goodbye," said one Yahoo! employee who said 10 friends lost their jobs.

CEO Jerry Yang will lose his title, and the company is actively and aggressively searching for a new CEO and an announcement on that could come as early as January.

Click here to read a post Yang published to Yodel Anecdotal, Yahoo!'s corporate blog, about the layoffs that are currently underway.


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