Yahoo profit plunges, layoffs announced
Troubled internet giant Yahoo saw quarterly profits plunge 64 per cent and announced Tuesday that it would cut 10 per cent of its estimated 14,300 staff to help control costs, dpa reported.
The internet pioneer reported net income of 54 million dollars, or 4 cents a share, compared to 151 million dollars, or 11 cents a share, in the same period last year.
The company said revenue rose slightly to 1.78 billion dollars compared to 1.76 billion dollars in the year-ago quarter. The results were in line with analysts' expectations, while the layoffs had also been widely reported in recent days.
The company said the job cuts were designed to help it reduce annual costs of 3.9 billion dollars by more than 400 million dollars.
"As economic conditions and online advertising softened in the third quarter, we remained highly focused on our 2008 strategy to invest in initiatives that enhance not only our long-term competitiveness, but also our ability to deliver for users and advertisers," company founder and chief executive Jerry Yang said in a statement. "We have been disciplined about balancing investments with cost management all year, and have now set in motion initiatives to reduce costs and enhance productivity."
The earnings drop heaped even more pressure on Yang, who earlier this year rejected a takeover of the company by Microsoft that valued Yahoo at about 33 dollars a share. Since then the share price has plummeted to about 12 dollars, and the company's plan to form an advertising alliance with Google is facing strong regulatory questioning.