More Yahoo Cuts Coming?

Peter Kafka | August 11, 2008 4:37 PM

jerryyang8.jpgKara Swisher, last seen immersed in the great Yahoo hanging chad scandal, is back with news that will be more pertinent to Yahoo employees and shareholders: The company, she says, is considering yet another round of cuts.

Kara surmises that cuts will be the outgrowth of two "navel-gazing strategy overview efforts" codenamed Aikido and Judo. But really, they're a product of the fact that Yahoo is struggling with its top line, and is going to have take out costs in order to meet operating cash flow projections.

...according to several sources within the company, besides more efforts to streamline Yahoo in both [consumer products and advertising products], Aikido and Judo are more specifically looking at what cuts the company can make to meet aggressive financial goals it promised when trying to rebuff a now-defunct takeover bid by Microsoft.

Thus, as Yahoo faces economic headwinds, sources within the company said that cost cuts in a range of arenas across the board–such as in its media and mobile properties–are being considered to make the numbers promised.

“Yahoo barely made its second-quarter numbers and there is a definite ad recession now,” said one source. “So now we have to once again rethink everything to deliver what we said we would, and the only way to do that is through cost cuts.”

We'd previously noticed that the company had put on a not-quite-a-hiring-freeze in July, but as far as we've heard, the company is hiring once again. Per usual, Yahoos: If you want to share your insight with us, leave a comment below or use our anonymous tip box.

See Also: Yahoo Hiring Freeze: Over?
Yahoo: We're Not Shutting Down Yet!
T. Boone Pickens Gets "Yanged," Loses Shirt on $250 Million Yahoo Bet
Yahoo's Hiring Freeze, Confirmed And Explained

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24 Comments

pasan said:
They have no real growth catalyst to speak of so cutting is the only thing they can do.
pj said:
I just started today, and there were several people on the new hire con call.
Thanks, PJ. That's helpful.
Kipling said:
I do not get it?
If they would cut the right people in the first place then Yahoo would not be in this postition.

Time to jump ship.
Their voting method and meeting plans was sleezy. Those board members are gripping tight on their position. A bunch of useless inconsiderate group.

I hope Icahn can get agressive and knock them out. He should have plenty of support by now. Time to move!
iPhoney said:
"...cost cuts in a range of arenas across the board–such as in its media and mobile properties–are being considered to make the numbers promised."

Something doesn't smell right there. Some of the Media properties (Sports, News, Finance) are the pillars of Yahoo on the content side. Maybe the source was referring to the under-performing media properties.

Mobile is another odd one. Mobile is the future...why cut that?
andres said:
iPhoney

Mobile was the future, it is not the future anymore.

Who is going to close a mobile deal with yahoo to serve google text and search ads?

The google deal will kill yahoo, and it will be fast.

stone said:
Totally agree with andres. There's no longer a credible reason to work with Yahoo is areas relating to search, search monetization or contextual advertising. They have FAILED in all areas. This is a fact!
David E said:
Andres, you couldn't be more right. Yahoo really has become a "dead man walking" at this point.
URClueless said:
Come on guys. You've got to big kidding. On one hand you say Yahoo can't compete with Google on search. Yet, when they decide to get out of the biz by entering into a rev share deal with Google, you chastise them and say they have failed.

Reality is that if what they say is true, that Google can monetize search 25% better than Yahoo, then if Yahoo only gives Google 20% of the total rev, Yahoo in essence can make more money by doing NOTHING and redeploying those search resources to things they are good at like display advertising, video and mobile.

Let's see Google compete with Yahoo on display advertising. If YouBoob is any indication, Google's in for a much tougher battle. Don't take my word for it, just ask Eric Schmidt who just admitted this week that YT is a LOSS LEADER.....

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