Yahoo plans job cuts as chief aims for revival

San Francisco: Yahoo! Inc is considering making significant cuts to its staff, a person familiar with the matter said, as Chief Executive Officer Scott Thompson overhauls the Web portal's business to cope with market-share losses.

The firings could begin in a few weeks, said the person, who declined to be identified because the moves haven't been announced. Thompson, a former eBay Inc executive, said in January that the Sunnyvale, California-based company would focus on its strengths and "prioritise" how its uses its capital.

Yahoo, owner of the most popular US internet portal, is looking for ways to increase efficiency following a failed turnaround effort under Carol Bartz, who was fired as CEO in September. Online advertisers have increasingly turned to rivals such as social network Facebook Inc and search engine Google Inc, websites where users are spending more time each month.

New business models

"We need to innovate and disrupt, and not just in the areas where we've always been," Thompson said on a conference call with analysts on January 24. "We will consider new business models and revenue sources and we will build on our core technology and platform expertise."

The planned firings were reported earlier by the website AllThingsD, which said the cuts "are likely to number in the thousands." Even though Bartz eliminated jobs while at Yahoo, the company had 14,100 employees at the end of 2011, up from 13,600 at the end of December 2008, less than a month before she became CEO.

"Our leadership is engaged in a process that will generate significant strategic change at Yahoo, but final decisions have not yet been made at this point," Dana Lengkeek, a Yahoo spokeswoman, said in an emailed statement. "Beyond that, we will not comment."

Yahoo lost its lead in US display advertising in 2011 to Facebook, owner of the world's largest social-networking service, according to New York-based EMarketer Inc. Yahoo's share was 11 per cent last year, down from 14 per cent in 2010, while Facebook's was 14 per cent, up from 12 percent. Yahoo's share peaked at 18 per cent in 2008, EMarketer said.

In January, Yahoo said fourth-quarter revenue, excluding sales passed on to partner sites, fell to $1.17 billion. Income from operations in the first quarter will be in the range of $105 million to $155 million, Yahoo said, shy of the $184.2 million that analysts had projected, according to data compiled by Bloomberg.