It has been announced that internet giant Yahoo will cut 2,000 jobs in a move which is being called the most sweeping job cuts of the company’s 18 year history. The cuts come as part of a strategy by its new chief executive, Scott Thompson, to shake up the company.
14 per cent of the work force, a figure representing 2,000 people, will lose their jobs during a restructuring process aimed at fuelling growth which has so far failed to materialise with previous efforts. After a 2 month intense review Scott Thompson emphasised that although there would be significant cuts the company was dedicated to a return to growth which he sees as the company’s only chance of returning to the top of the internet giant food chain.
It is believed that Yahoo needs to make deep financial cuts to help bring it in to line with other internet companies with the amount of revenue generated per employee currently standing at around 50 per cent of that generated by others. The job cuts are expected to save Yahoo an estimated $375 million per year although the first year savings are likely to be around $125 million – $175 million once employee severance packages are factored in.
Yahoo are expected to disband its large centralised product development group handing the initiative to smaller unites in a bit to help speed up the development and creation of new services.
More details regarding the cuts are expected later this month.