Yahoo Could Alter Course With Layoffs

    October 29, 2007

We’ve run several, several stories in recent weeks about Yahoo execs leaving the company, and the departures have been, as far as we can tell, completely voluntary.  But according to one analyst, a solution to most of the company’s problems would be for roughly 1,200 other employees to involuntarily follow suit.

This isn’t a fact, or even a rumor, so much as speculation (X People = Y Costs and so on).  Still, the idea of layoffs comes from Henry Blodget, and given the trends we’ve seen, is worth noting.

Not a whole lot is going well for Yahoo – there are Site Explorer errors, the shutdown of Yahoo 360, and its complete absence from the Google-Microsoft-Facebook competition to consider.  So Blodget writes, “We think Yahoo should get its margin back at least to where it was in the September quarter last year–30%–which will require about $240 million in annual cost cuts.  Most of these cuts should be made in the U.S., because it is the U.S. operating margin that has deteriorated.”


He then hits upon one possible fix: “Yahoo could achieve these cuts immediately by cutting $120 million of non-human-expenses and laying off about 1,200 people . . . ”

Again, this is by no means a sure thing – a trusted source even weighed in following Blodget’s article to state that such drastic cost-saving measures probably won’t be necessary.  Yet if things continue to tank, Yahoo’s employees might do well to have a Plan B on hand.