Yahoo Layoffs A’comin’

the recession it appears is starting to effect another internet player — Yahoo. Yahoo has not had the revenue strength of say a Google but they have a well stocked technical larder. The layoffs though expected are surprising by their depth.

The Sunnyvale-based company’s biggest purge since the dot-com bust most likely will be announced next week, a person familiar with the matter said Tuesday. The person asked not to be identified because the exact number of jobs to be cut is still under discussion.

Yang and his management team already have committed to jettisoning at least several hundred jobs to help boost Yahoo’s profits and placate investors demanding more action to reverse a steep decline in the company’s stock price.

Securities analysts are betting Yahoo will trim its 14,000-employee payroll by about 5 percent - or 700 workers. If that many people are dumped, Yahoo could save about $100 million, JP Morgan analyst Imran Khan estimated in a Tuesday note.

Besides trimming Yahoo’s expenses, job cuts could help buy Yang more time to carry out his strategy to re-establish Yahoo as a main entry point to the Internet and create a more compelling online advertising network.

Many investors had been questioning whether Yang was too emotionally attached to the company that he started in 1995 to make the tough decisions needed to turn it around, said Standard and Poor’s equity analyst Scott Kessler.

“A lot of what drives the market comes down to perception and, rightly or wrongly, there is a perception that Yahoo needs to be repaired,” Kessler said. “To gain credibility, you need to make hard choices like this.”

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