Yahoo plans to cut about 14% of its workforce as new CEO Scott Thompson seeks to restructure the company into a more agile and focused competitor as it struggles to compete with rivals Google and Facebook.
Yahoo – who currently employs around 14,000 people – announced on its website Wednesday that it would cut 2,000 jobs, which it said would realize around $375 million in annualized savings upon completion of all employee transitions.
Yahoo also said it would “recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results”, which will be announced April 17.
The decision marks Yahoo’s third round of layoffs since 2008, and will bring the total of job cuts to almost 6,000. The company saw both its revenues and profit shrink last year whilst its competition has seen rapid growth.
“Today’s actions are an important next step toward a bold, new Yahoo! – smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Thomson, who took the reins at Yahoo in January. “Our goal is to get back to our core purpose – putting our users and advertisers first.”
Yahoo said it has identified “key parts of the business – a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers” – where it will “intensify efforts and redeploy resources globally”.
Yahoo is expected to release further details when it releases its Q2 results later this month.
Meanwhile, the news didn’t impress Wall Street – Yahoo's shares on the Nasdaq ended down 0.6% at $15.27, reports Reuters.