Yahoo To Cut Jobs After Flat 3Q Performance
- By Jim Barthold
- October 22, 2008
Yahoo's revenue was up by one percent, year-over-year, according to its third-quarter results published on Wednesday, but its workforce will still get cut by 10 percent.
The company posted $1,786 million in revenue for the quarter, up from $1,768 million in 3Q 2007.
About 1,500 jobs will be eliminated by the Sunnyvale, Calif.-based online advertising and Internet search company. Yahoo's stock finished trading on Wednesday at $12.39 per share, a near low point for the year. The company's stock hasn't been the same since May, when Microsoft called off an unsolicited takeover bid for all of Yahoo.
Yahoo employees getting pink slips must be wondering if it wouldn't have been better for the company to have succumbed to Microsoft's offer, which was announced in late January. After that announcement, Yahoo's stock rode high at $28.38 per share. Microsoft eventually had offered to pay $33 per share for Yahoo before backing out.
While Yahoo resisted Microsoft's overtures, it paid a penalty. Buried in Yahoo's 3Q announcement is a $37 million cost for advisor fees to deal with Microsoft's offer and an alternative deal with Google.
The Google talks are still ongoing, with a plan to share online ad-search revenues that is being reviewed by the U.S. Department of Justice.
For some, Yahoo's proposed 1,500-employee cutback isn't enough. IT tech stock pundit Henry Blodget of the Silicon Alley Insider Web site suggested that the company should "cut its workforce by at least 3,000 employees." It would return the company to its second-quarter 2007 size, he wrote.
"Yahoo is fat. It will still be fat after it lays off 1,500 employees," wrote Blodget. "We hope the company does not fall into the death-by-a-thousand-cuts trap that has plagued AOL for years, but it certainly seems headed that way."
Jim Barthold is a freelance writer based in Delanco, N.J. covering a variety of technology subjects.