John Paczkowski

Recent Posts by John Paczkowski

Time to Put Yourself on That Layoff List, Jerry?

sword_of_yangocles.jpgThe Damoclean sword of workforce reductions suspended above Yahoo will fall within the next few weeks. This according to Silicon Alley Insider, which claims Yahoo will indeed move ahead with the “emphasis reduction” it hinted at last week and sack between 1,500 and 2,500 employees.

A source close to the company tells SAI that Yahoo has finalized its list of layoffs and will announce them during its fourth quarter earnings call tomorrow. Tough to say what sort of effect they’ll have at this point, given the shape Yahoo’s in these days. Certainly, CEO Jerry Yang has to do something. Since he took over, Yahoo shares have lost more than 22%, trading at $21 at this writing.

“We won’t know the financial implications until the layoffs get announced,” says Steve Weinstein, an analyst with Pacific Crest Securities. “But if it doesn’t, the expectation will grow exceedingly. This is a stock that was at $40 [two years ago]. You’re seeing investor frustration. Yahoo has to find ways to regain momentum.”

Or maybe, as Bubblegeneration’s Umair Haque suggests, it should just throw in the towel. “Yahoo’s problem is DNA,” writes Haque. “Yahoo, you’ve held back thousands of very talented people for the last five years and prevented them from making the fullest use of their talents and insights. … You guys all let Terry Semel make the third fundamental error of strategy–to mistake deal-making for strategy. In the process, you sold out a deeper set of principles; you forgot that the job of a revolutionary is never to sell out, and the point of a strategy is fundamentally to create new value. … The fundamental assumptions behind your thinking are deeply in error, and so your strategy is in massive decay. So please, don’t put up a fight–let these guys go build the cool start-ups and pioneer the radical innovation you’ve stifled and suffocated for the last half-decade.”