Yahoo! quarterly profits decline, job cuts widely expected

30-01-2008

Yahoo! quarterly profits decline, job cuts widely expected
Yahoo! has reported that comparable fourth-quarter operating income fell by 38 per cent as the struggling company continues its restructuring.

In a conference call yesterday, chief financial officer Blake Jorgensen said that the firm expects a "workforce realignment of approximately 1,000 people".

The statement largely confirms layoff rumours as Yahoo! undergoes major reorganisation to cut costs and "streamline" in order to compete with rival Google.

Although it is unclear exactly what the "realignment" might entail, job-cut rumours for the web search engine company range from several hundred to several thousand.

"This sort of transition takes time," Jerry Yang, Yahoo! co-founder and chief executive, said during a conference call with analysts yesterday. "But we have the talent and the strong cash flow it takes to succeed."

"Rather than across-the-board cuts, we'll make targeted reductions alongside targeted investment," he added.

Profits for the fourth-quarter were put at $205.7 million (£102.85 million), more than a 23 per cent decrease from last year's $268.7 million (£134.35 million).

Looking ahead, the employer of over 14,000 said that it expected revenues for 2008 to be in the range of $535 billion (£267.5 billion) to $595 billion (£297.5 billion), missing Wall Street estimates which put the figure at $585 billion (£292.5 billion).

Shares in Yahoo! fell more than ten per cent to $18.71 (£9.36) in extended trading on Wall Street yesterday after closing at $20.81 (£10.41).

The California-based web portal has seen its shares lose 40 per cent of their value since October 2007, while Google's have lost 20 per cent over roughly the same period.

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