Yahoo is a company trying to find its future at the same time that it's struggling to stay competitive with its powerful rival, Google. The layoffs come after Yahoo reported a 23-percent drop in its latest quarterly earnings.
John Letzing covers yahoo for marketwatch.com.
"We don't know where the layoffs are going to come. We don't know just how many are going to come," says John Letzing, an analyst who covers Yahoo for MarketWatch.com. "The company announced a realignment of a thousand jobs -- that could simply mean they are going to eliminate a thousand jobs. It could mean they are going to move some jobs and then cut others."
Yahoo is facing a juggernaut in Google which has a 56-percent share of all U.S. Internet searches. Yahoo has only 17-percent. The smaller number of eyeballs going to Yahoo means less revenue from advertisers, and that's one of the reasons why Yahoo is projecting a challenging year ahead.
Karsten Weide is an analyst with IDC and former head of Yahoo's German operation. He points out that Yahoo has already been losing top talent in the highly competitive Silicon Valley job market. He doesn't see lopping off 1,000 employees as a fix.
"A thousand layoffs, you would think that's about five-percent of the workforce. You would think that pretty much all departments would be affected, even though they said they would pick and choose and just have select layoffs," says Weide.
The layoffs are scheduled to happen in mid-February. That leaves employees like Scott Johnson, who works in customer care, unsure of his future with the company.
"I don't know, I honestly don't know. Nothing's really talked about here... not sure," says Johnson.
News of the 1,000 layoffs came after the close of the market during a telephone conference call with analysts discussing the latest quarterly results.
Yahoo turned us down for an interview.