Yahoo to cut staff by 10%

Yesterday, Internet giant Yahoo reported a 64% drop in earnings leading to the announement that the company will be forced to cut its staff by ten percent by the end of the year. 

According to Variety, the cuts are an attempt to trim $400 million from the budget and will be the second round of cuts the company has faced this year.   Reports indicate that up to 1,400 employees will face a lay-off due toe the cut.  Yahoo cut 1,000 positions in January of this year and has faced struggles to retain key executives in the wake of an unsuccessful and unsoliticited take-over bid by software giant Microsoft last month.

During Yahoo’s conference call with analysts,  Jerry Yang repeatedly referred to economic conditions, citing the uncertain advertising market, but also reminded listeners that the company had weathered a down cycle before when the tech bubble burst.

Yahoo’s biggest problem is rival search engine Google.  Google has posted modest gains in recent months, with revenues growing.  In the same period, Yahoo’s revenues and ad sales have been declining. 

Yahoo execs said the slowdown hit them in other regions, such as Asia, as the global economy imploded during the quarter. Display ads were especially hard hit. “This is in many ways an unprecedented ad market,” Yang said.