Yahoo announces first quarter results and a 5% cut in staff


Yahoo announces first quarter results and a 5% cut in staff

Warwick Ashford

Yahoo has announced a further 5% staff cut on the same day as first quarter financial results, but says the two are not linked.

The announcement comes just months after Yahoo announced a 10% reduction in staff.

Yahoo said most of the employees affected by the latest cuts will be notified within two weeks.

Yahoo reported first quarter revenues of $1,58m - a decrease of 13% from the first quarter of 2008.

Although below expectations, the results were far better than those for the last quarter of 2008, in which Yahoo reported a net loss of $303m.

Carol Bartz, who took over as chief executive in January, said an economy-driven decline in advertising spending had depressed results more than some analysts had expected.

She said the reduction of around 600 jobs is not in response to market conditions, but linked to decisions about what properties Yahoo could live without, according to the Financial Times.

Blake Jorgensen, the outgoing chief financial officer, said many of the job cuts would be in global engineering and product teams and would enable Yahoo to hire staff in other areas of the business.

Although Yahoo's revenue fell below analyst expectations, reduced capital expenditure and other savings put cash flow slightly above expectations.

"Yahoo is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range," said Bartz.

Net income fell to $118m, or 8 cents a share, from $537m and 37 cents a share in the same period a year ago.

Yahoo expects second-quarter revenue of roughly $1.52bn and income from operations of about $85m.

However, Bartz said the savings from the job cuts and reduced capital expenditure would not necessarily boost profits as she intends to invest in strengthening the company is some areas.

Bartz said she expects online brand advertising to pick up again as the economy improved and revenue per search to improve as online spending returned to normal.

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