Tuesday, Jun 28, 2016
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Beleaguered Yahoo plans layoffs for 2,000 workers

SAN FRANCISCO -- Yahoo Inc. is laying off 2,000 employees as new Chief Executive Officer Scott Thompson eliminates jobs that don't fit into his plans for turning around the beleaguered Internet company.

The cuts announced Wednesday represent about 14 percent of the 14,100 workers at Yahoo, not including contract workers.

Yahoo estimated it will save about $375 million annually after the layoffs are completed later this year. The Sunnyvale, Calif.-based firm will absorb a pretax charge of $125 million to $145 million to account for severance payments. The charge will reduce Yahoo's earnings in the current quarter.

Yahoo's stock price rose less than 1 percent to $15.27 Wednesday. The stock has dropped 5.3 percent this year.

Workers losing their jobs were being notified Wednesday. Some affected employees will stay on for an unspecified period to finish various projects, Yahoo said.

The housecleaning marks Yahoo's sixth mass layoff in four years under three different CEOs. This one will inflict the deepest cuts yet, eclipsing a cost-cutting spree that laid off 1,500 workers in 2008 as Yahoo tried to cope with the Great Recession.

Previous purges under co-founder Jerry Yang and successor Carol Bartz boosted earnings. But the moves didn't reverse a revenue slump, which has disillusioned investors yearning for growth when more ads are flowing to the Internet.

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