Yahoo! said Wednesday that it will be laying off 2,000 employees, or roughly 15% of its workforce, as it takes “important next steps to reshape the company for the future.”
Yahoo! said that starting today it will begin the process of informing employees about these changes.
“As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition,” Yahoo! said, while noting that it expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company said it currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results.
Through its restructuring efforts, Yahoo! said it intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! 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 the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value.
According to Yahoo!, the company has nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly.
Scott Thompson, CEO of Yahoo!, said, that “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. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities.”
Thompson said the company’s goal “is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” adding that, “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”
Yahoo! said that with a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.
The company said it may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.