An estimated 700 Yahoo! employees are set to lose their jobs according to an unnamed source close to the company, as it plans to downsize in order to contend financially with its main competitor: search engine and online advertising giant, Google.
Currently Yahoo!, whose revenue mostly comes from search advertising, has about 13,600 employees, meaning that nearly 5pc of its workforce may go.
It is thought the announcement will come on 29 January when the company gives out its fourth-quarter results, which will come on the back of seven consecutive quarters of falling profit.
While there are no details on where the potential job losses may occur, Yahoo!’s European operations headquarters in Dublin are currently recruiting new employees in the areas of finance and sales.
Although Yahoo! declined to comment on the rumoured job cuts, it did say in an official statement yesterday that it “plans to invest in some areas, reduce emphasis in others and eliminate some areas of the business that don’t support the company’s priorities.”
While web portals like Google and social networking sites like Facebook have been eating into the company’s user base, the Yahoo! site still manages to get over 130 million unique users per month but the company’s co-founder and current CEO Gerry Yang has been restructuring over the past year following his return to power in June 2007.
After former CEO Terry Semel left, Yahoo!’s display and search advertising sectors were merged under direct control of David Karnstedt, the senior vice-president of the search sales department, after which Yahoo! invested in interactive advertisement with the acquisition of Right Media for US$650m in July 2007.
While the current restructuring is generally rumoured to involve the loss of 700 jobs, former Wall Street internet analyst Henry Blodget reported on his blog, Silicon Valley Insider, that according to a ‘tipster’ as many as 1,500-2,500 may go in the next two weeks.
By Marie Boran