Yahoo Confirms Profit Drops and Job Cuts

October 21st, 2008 at 12:00 am
 


yahoo stocks fall

Yahoo today announced their third quarter earnings and as expected profits dropped sharply and hence jobs will be shed.

At a conference call at the Yahoo headquarters in Sunnyvale CA earlier today, Yahoo announced the bleak reality of their third quarter performance.  Net income for the third quarter tumbled to $54.3 million, or 4 cents per diluted share, from $151 million, or 11 cents per diluted share.  Market expectations already predicted that Yahoo would do bad this quarter but the figures are even worse than the predictions.

The saddest part of all this is of course for the employees.  The lucky ones will get pay slashes,  the unlucky ones or at least 10% of Yahoo’s global workforce of roughly 15000, will lose their jobs.  Much like any business, Yahoo’s response to lower earning is to slash benefits from its workforce and root out the unnecessary.  They call it cost cutting.

"The steps we are taking this quarter should deliver both near-term benefits to operating cash flow, and substantially enhance the nimbleness and flexibility with which we compete over the long term," Yahoo Chief Executive Jerry Yang said in a prepared statement.

"This is pretty much as expected," Collins Stewart analyst Sandeep Aggarwal said of Yahoo’s results and cost-cutting measures, adding that the company "had no other option" than to eliminate a significant number of jobs. [Market Watch]

Of course in the press release, Yahoo executives are managing their statements carefully to appease investors saying that these are bad times for business but they’ve kept focused on their strategy despite the poor economic weather.

"Despite a tougher revenue climate, we were able to stay focused on our strategic objectives, launching several major product initiatives that have been underway for many months," said Sue Decker, president, Yahoo!, Inc. "These include the beta release of our new home page, which will leverage one code base globally; our new universal profile management tool at profiles.yahoo.com which is the first step toward rewiring the social graph on Yahoo!; and the launch of APT from Yahoo!TM, a transformative digital advertising platform. We delivered on our product roadmap with high quality and lower expenses than originally anticipated. Now we are conducting a deep review of our cost structure to identify more opportunities to enhance efficiency and build a stronger and more profitable Yahoo!."