Yahoo this morning confirmed that it’s cutting 2,000 jobs, or about 15 percent of its workforce — part of an effort by new CEO Scott Thompson to make the company ”smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” as Yahoo put it in a news release.
As shown in this chart, the move puts the company in stark contrast with the likes of web giants Amazon and Google, which have been growing like crazy in recent years.
After the cuts, Yahoo’s employment will dip to its lowest point in five years, since back before the economic recession.
It’s not clear how the cuts will affect Yahoo’s partnership with Microsoft, which handles the underlying search and advertising technology for Yahoo under the agreement between the companies. Microsoft declined to comment this morning when we asked if it might look to hire some of those cut loose from Yahoo.
Kara Swisher of AllThingsD.com reports that the Yahoo cuts will hit particularly hard in the company’s product division, headed by former Microsoft executive Blake Irving. Swisher adds, “Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.”
USA Today has the full text of the memo sent by Thompson to Yahoo employees. Here are the three areas in which he says the company will focus.
• Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.
• Platforms: We must make our core platforms and systems a genuine strength for Yahoo! – platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.
• Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.