Yahoo to lay off 2, 000 employees to reduce costs

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Analysts are predicting another stellar increase in jobs last month, but that's not the case for troubled internet firm Yahoo which is poised to lay off 2,000 of its staff as the company looks to reduce costs in a bid to compete with rivals Google and Facebook.
Another round of painful cuts to the Silicon Valley giant, which started the day with 14,000 employees. The company still remains profitable. But it’s searching for ways to keep up with the competition.

A Yahoo! signs sits out front of their headquarters in Sunnyvale, California in this February 1, 2008 file photo. REUTERS/Kimberly White/Files

In a media statement, CEO Scott Thomspon said, "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purposes - putting our users and advertisers first. "
Rebecca Lieb, media analyst of Altimeter Group, said, "Yahoo has also said that they are doing this to bolster their core business but again yahoo has had such an identity problem over the past several years that I think many people are in doubt as to what their core business is specifically."
Attending the Ad Tech San Francisco conference, Lieb says the stable core is likely to be its news, information and email services. But an area likely to fall out is Yahoo’s search business, which in Lieb’s words has all but stopped competing. The product division, as well as marketing and research units are also clear targets for the cuts.
Rebecca Lieb, media analyst of Altimeter Group, said, "What we don’t know yet is where this is going or what his plan is to drive yahoo into the future either in terms of becoming a more robust or more profitable company, or in terms of being an attractive item for sale to some other internet or technology or media company."
While some analysts believe this is only the beginning, Lieb says she does not believe cuts of this scale are likely to happen again soon.CEO Scott Thompson described the layoffs as the next step toward a bold new Yahoo! - smaller, nimbler, more profitable and better equipped to innovate. He says the cuts will save Yahoo 375-million dollars.

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What about Google?