Yahoo Inc. is planning to lay off 1,000 of their 14,300 workers due to their 23 percent decrease in fourth-quarter profits and not being sure about their financial outlook for 2008. After the news was released, Yahoo shares hit their lowest levels in more than four years. Their market value has decreased more than 50 percent since the end of 2005.
Yahoo didn’t say which areas of its operations would be cut but some of the employees whose jobs are being eliminated might be offered new jobs in other parts of the company. Yahoo expects to pay between $20 million to $25 million for severance and other costs in the lay off. With the lay offs and cost cuttings, Yahoo could save more than$100 million dollars in costs and offset some of the financial loss that they expect from a re-negotiated partnership with AT&T Inc to provide high-speed Internet service. Yahoo and AT&T will share the revenue made through online advertising.
Yahoo hasn’t stopped making money but their profits fell by 12 percent in 2007 even though advertisers spent a lot of money on the Internet. The company is also working hard to try to attract more teenagers and young adults to the site.
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