Yahoo to lay off 1,000 workers

By MICHAEL LIEDTKE

Jan 29, Business Week

SAN FRANCISCO

Yahoo Inc.'s financial funk deepened at the end of 2007, prompting the slumping Internet icon to draw up plans to lay off as many as 1,000 workers.

The Sunnyvale-based company disclosed the upcoming 7 percent reduction in its 14,300-employee work force Tuesday while reviewing a 23 percent drop in fourth-quarter profit and a cautious 2008 outlook. The bad news sent Yahoo shares skidding to their lowest levels in more than four years.

In a prepared statement, Yahoo Chief Executive Jerry Yang warned of looming "headwinds," indicating that the company's tortuous turnaround efforts aren't likely to pay off this year.

"I'm surprised by how slowly they seem to be moving," said Cantor Fitzgerald analyst Derek Brown. "Yahoo still has quite a bit of work ahead."

Yahoo shares dropped $2.09, or more than 10 percent, in extended trading Tuesday after finishing the regular session at $20.81, up 3 cents. The company's market value has plunged more than 50 percent since the end of 2005, wiping out $35 billion in shareholder wealth.

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