Back in October, Yahoo announced it would be laying off about 1,500 employees; today, the company is expected to detail those layoffs, with the bulk of the job cuts expected to land in the company’s human resources and finance divisions. The 1,500 job cuts represent about 10 percent of the company’s total work force.
In October, Yahoo CFO Blake Jorgensen indicated the company would consider additional job cuts in 2009 if the economic situation continued to worsen. Yahoo had also indicated it planned to jettison jobs in markets with high costs of living—like the United States—and hire aggressively in markets like India, southeast Asia, and Eastern Europe, where the cost of bringing employees on board is considerably lower.
In the meantime, Jerry Yang has announced he will be stepping down from his position as Yahoo’s CEO; the company has not yet named a replacement.
Adding to the ongoing turmoil at Yahoo, one of the company’s major investors is urging the company to sell its Internet search business at Microsoft’s feet. In early 2008, Microsoft made an unsolicited bid to take over Yahoo; after many months of maneuvering, the companies were unable to reach a deal, and Yahoo angered its investors by walking away from a takeover offer worth over $45 billion. Now Ivory Investment Management LP, one of Yahoo’s largest single shareholders, is pushing the company to sell its search business to Microsoft. In a letter to the Yahoo board of directors, Ivory says Yahoo could get about $15 billion out of Microsoft for the search operations, and stipulate that Yahoo still receive 80 percent of the revenue from search queries on Yahoo sites. Ivory argues that revenue alone would be worth about $1.6 billion a year.
Ivory controls about 1.5 percent of Yahoo’s shares.
Microsoft CEO Steve Ballmer has indicated Microsoft is no longer interested in taking over Yahoo, but might be interested in the company’s search operations. Yahoo is currently the second-largest Internet search engine with roughly a 20 percent share of the online search market. Search shares of AOL, Microsoft, and Ask.com are all soundly in the single-digits, with Google dominating the market.
