Restructuring, Layoffs Imminent At Yahoo

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At the beginning of the year we reported that Scott Thompson, former president of PayPal, had been chosen by Yahoo to replace former CEO Carol Bartz. Now that he’s had time to settle in, it looks like Thompson is getting ready to make some big changes in an attempt to get Yahoo back on track.

Citing sources both inside and outside the company, AllThingsD is reporting this morning that Thompson is making preparations for a significant restructuring of Yahoo. The changes are expected to include perhaps thousands of layoffs. The main targets of the restructuring are apparently the company’s PR and marketing, research, and other underperforming divisions. divisions. The layoffs could take massive chunks out of Yahoo’s current staff of about 14,000.

Shortly after Thompson took over at the beginning of January, he began taking steps to get Yahoo out of the trouble it’s been in for several years. Later that month, Yahoo’s earnings report for the fourth quarter of 2011 showed that the company’s revenue had decreased by 4% from the fourth quarter of 2010. Search traffic, while still generating the lion’s share of Yahoo’s revenue, also dropped.

Last month rumors started to circulate that Yahoo may have a major reorganization in the works. It looks now like those rumors were correct. No matter what this restructuring ultimately looks like, you can bet that Yahoo will be a very different company once it’s done. Whether it will be enough to save the struggling search company remains to be seen.

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