December 14, 2010, 8:57 AM — To the surprise of absolutely no one, Yahoo will lay off between 600 and 700 employees, perhaps as early as Tuesday. This represents about 5 percent of the struggling Internet company's total workforce of 14,100.
This is the fourth round of mass layoffs by Yahoo in the past three years. Rumors of the latest round began swirling about five weeks ago, when reports surfaced that the company was preparing to eliminate 20 percent of its current jobs. Yahoo quickly dismissed these reports as "misleading and inaccurate," but issued no outright denial. Now we know why.
According to the Wall Street Journal and other media outlets, the layoffs will be from Yahoo's products group, which employs nearly half of the company's employees. The group is responsible for Yahoo's Web properties, including the finance, sports and news pages. Despite Yahoo's inability to grow revenue in recent years, these destinations remain popular among Internet users. Yahoo is the No. 4 most-visited property on the Internet, trailing only Google, Facebook and YouTube.
Yahoo's products division is run by Blake Irving, who joined the company in April. Irving had been corporate vice president of Microsoft's Windows Live Platform unit, but left the software giant in 2007 and had been teaching at Pepperdine University before taking the Yahoo job.
The layoffs represent the second round of job reductions under the tenure of Yahoo CEO Carol Bartz, who has struggled to turn around the company since being hired in January 2009. Bartz laid off 675 workers in March 2009. In December 2008, under the tenure of former CEO Jerry Yang, Yahoo axed 1,500 jobs. Another 1,000 jobs were cut in February of that year.
Yahoo's revenue and stock price have remained stuck in neutral while larger online advertising rival Google has continued to demonstrate impressive growth. Google announced last month that its more than 23,000 employees would receive 10 percent pay hikes and $1,000 holiday cash bonuses.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.