Yahoo hands out 600 layoff notices for holidays

Exterior of Yahoo headquarters in Sunnyvale, Calif. (AP Photo/Paul Sakuma)

December 14, 2010 1:50:32 PM PST
Yahoo is laying off hundreds of employees during this holiday season -- the fourth round in three years for the Sunnyvale-based company. It will add to California's already sky-high unemployment rate, which is at 12.4 percent. Currently, the national unemployment rate is 9.8 percent.

Six hundred layoffs were announced this morning about 9 a.m. at Yahoo, about 4 percent of the company's entire workforce of 14,000. Most of the jobs lost are in the United States and most are in Yahoo's products group.

This is not a surprise to industry insiders, since it's been discussed on a couple popular blogs since last month. It's also not a surprise for anyone looking at Yahoo's numbers. Its revenue is up less than 2 percent over the first nine months of this year, while rival Google saw its revenue jump 23 percent.

While the Nasdaq is up 16 percent over the past year, Yahoo stock is actually down slightly over that time.

Some say the buck stops with CEO Carol Bartz who came over from Autodesk two years ago and was never a fit for the top job at Yahoo.

"She came in to Yahoo from a company that sold engineering software to engineers and Yahoo couldn't be more different. I mean, this is a company, a web company based on advertising revenue, they do portals. It's like apples and oranges; it's like hiring oral hygienist to do major surgery on an elephant. It wouldn't work well," industry analyst Rob Enderle said.

Yahoo's statement said, "Yahoo is always evaluating expenses to align with the company's financial goals. Beyond that, we don't comment on rumors or speculation."

Yahoo cut 1,600 jobs the year before Bartz arrived. The 62-year-old has also worked at Intel, Cisco and Sun MicroSystems, so she may not be as one-dimensional as some suggest.

As far as stock market reaction to the layoffs, Yahoo's share are down 3 cents, to $16.67. There is also talks and speculations about AOL taking over Yahoo.

In any event, ABC7 heard the folks being laid off are receiving what is being called a 'pretty good' severance package.