Yahoo is to lay off at least 1,500 employees
as part of a cost savings plan after releasing poor third quarter
results.
This is the second time in nine months that Yahoo
has resorted to staff cuts to reduce costs as share prices have
fallen to five-year lows.
The internet firm’s third quarter net income
dropped to £33.1m, or 2p a share, from £92.2m, or 7p, a year ago,
Yahoo said in a statement.
Yahoo chief executive Jerry Yang said in a memo
that the company has been through a tremendously challenging
year.
He said managing the "increasingly turbulent global
advertising climate" has been an important focus for the last three
months.
The latest round of staff cuts are part of a plan
to save more than £244m a year and confirmed speculation ahead of
the earnings announcement.
Yang said the company would be targeting
non-headcount expenses wherever possible, such as facilities and
outside services.
"However, because compensation expenses are the
single largest part of our costs, we anticipate a reduction of at
least 10% of our global workforce by year-end," he said.
Affected employees are to be notified of layoffs in
the next several weeks.
Yang said the company was moving ahead with "a
clear focus on accomplishing what is necessary to set the
organization up for long term success".
Yahoo shares fell 48p to £7.36 in regular trading
yesterday, but gained 7.3% in after hours trading.
US market commentators have said that Yang’s
rejection of Microsoft’s takeover offer of £20 in May is now
looking like a "horrible mistake".
In August,
Yang and Yahoo chairman Roy Bostock were criticised for the way
they dealt with the
Microsoft bid. Several investors slammed them for holding out
for too high a price.