Yahoo bows to financial crisis and sheds 1,500 jobs

by Stevie Smith - Oct 22 2008, 17:28

Apple might well be celebrating “stunning” quarterly financial figures that convincingly sidestep the current economic depression, but the same can’t be said of Yahoo, which has today announced it is to shed a huge 1,500 jobs after the Internet giant’s profits plummeted over the third quarter.

The staff cull will see Yahoo showing the door to approximately 10 percent of its 15,000-strong global workforce as it attempts to juggle operating numbers in light of a quarterly profit slump equating to some 64 percent.

And, beyond swinging the scythe of doom through its vast cornfield of employees, the Internet pioneer could also be forced to pull the rug out from beneath select U.S. offices and outsource positions to cheaper foreign contractors.

A Washington Post report suggests Yahoo’s current market misfortune is likely to reach well into 2009 as it attempts to soften the blow of recession by hacking around $400 million USD from its annual expenses of $3.9 billion USD.

“I believe getting Yahoo more fit at this time will provide the flexibility necessary for navigating current conditions and strengthen our position for the future,” CEO and co-founder Jerry Yang told analysts during a Tuesday conference call.

These latest impending cuts mark the second time this year that Yahoo has rifled through its staff to offset ailing performance, with the company losing around 1,000 members of its workforce back in February.

Yahoo’s drastic action has come about after it posted third-quarter earnings of $54.3 million USD, which is a monumental year-on-year plunge from the $151.3 million registered in Q3 of 2007.

In related news, and as a clear indication that the global financial crisis is spreading through some of Silicon Valley’s big hitters, online auction site eBay is to drop some 1,600 jobs while search behemoth Google is reportedly in the process of tightening its belt.

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