Yahoo: Layoffs Coming, But Smaller Than Expected

Those large, rumored Yahoo layoffs that are currently giving succor to some hoping that Yahoo will finally focus, drop search, and generally do things to drive up its share price? They get shredded (or least frayed) today via an insider-sourced piece in the NYT quoting people "close to the company" as saying that Yahoo will lay off "hundreds" toward the end of January.

Hundreds? Rumor had the number at 10-20%, which would have produced, given Yahoo’s 11,400 employees, anywhere from 1,140 to 2,280 layoffs. Hundreds might produce half the lower number, or, at a fully burdened cost per person of $150k, a few pennies per share in savings, versus the $0.12-$0.26 we would have seen at higher layoffs.

What does it mean? It means that when Yahoo does deliver the layoff numbers, perhaps around Jan 29th earnings day, the company’s stock will likely be sold, with the numbers not matching the whisper and therefore disappointing investors with its lack of aggression.


  1. Excellent points, Paul. Yahoo’s strategy doesn’t appear to be aggressive enough to impress the Street or shareholders.
    Are you bullish on Right Media? It seems to be the one division with tremendous growth potential.
    That’s one Yahoo division that may be spared the knife.