Layoffs at Yahoo likely to come next Tuesday

A rumor brought to light this morning by notorious financial insider and blogger Henry Blodget may this time be true, as Yahoo's response appears to warn of bad news ahead in its next restructuring move.

A Yahoo spokesperson's statement to BetaNews this morning appears to indicate that the company may be preparing to announce some tough news during its upcoming quarterly analysts' call next Tuesday. Specifically, the spokesperson declined to deny a rumor posted to Henry Blodget's Silicon Alley Insider blog yesterday evening, saying the company was preparing to dismiss as many as 2,500 employees -- about 17% of its present workforce.

"Yahoo has embarked on a multi-year transformation that includes making tough decisions about the business to help the company grow," stated Senior Director for Corporate Communications Diana Wong, in an e-mail this morning to BetaNews.


"Yahoo has focused its efforts to support its strategy to become the indispensable starting point for consumers, advertisers, publishers and developer," Wong continued. "Yahoo plans to invest in some areas, reduce emphasis in others, and eliminate some areas of the business that don't support the Company's priorities. Yahoo continues to attract and hire talent against the company's key initiatives to create long-term stockholder value."

The reduced emphasis part of Wong's comment may not be a mystery: Since Jerry Yang resumed the CEO post last June and Susan Decker moved up to the president's position, it has been very clear that Yahoo is no longer interested in being a big multimedia content producer. The scaling back would obviously take place with regard to former CEO Terry Semel's pet projects: the Hollywood-style production projects he initiated which harked back to his time as Warner Bros.' co-CEO.

If the news does come next Tuesday, financial analysts are likely to welcome it. In fact, some indicated this morning that a headcount reduction of anything fewer than 2,100 would be viewed as a negative.

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