Yahoo's blues: Looming layoffs, tense call
Yahoo's in the middle of rolling out a new front page -- a phrase that ought to enter the lexicon next to "rearranging deck chairs on the Titanic" if rumors of significant layoffs are true.
The rumor mill is having its way with Yahoo again this week, as talk of staffing cuts sets nerves on edge before Tuesday's quarterly earnings call. A report in The Wall Street Journal following days of Silicon Valley whisperings states that a person "familiar with the matter" (boilerplate language when the call is coming from, as they say, inside the house) expects over 1,000 jobs to be cut in coming months, while managers in-house have allegedly been asked to pare their budgets by at least 15 percent.
The market liked the idea of layoffs, a least a little. Trading on Monday started at $12.96 and, after a bracing morning dip to $12.33, wandered back up to $12.86 at the closing bell and wavered in the $12.75 range afterward.
Layoffs may help the bottom line in the short term, but Yahoo's real problem -- other than trying to explain to investors how a company that was allegedly undervalued at $33/share when Microsoft came calling this summer is now trading in the tweens, and other than dealing with the lacerating effect that layoffs have on both public perception and on the survivors of the purges, and other than the Department of Justice's still-raised eyebrow at the prospect of a Google-Yahoo ad-sales partnership -- is that public perception of the #2 search site is not that it tries harder.
A column in this week's Newsweek flames the leadership of co-founder Jerry Yang, and Yang's recent argument that Yahoo could work its way past that $33/share valuation given a few years is not likely to fall on receptive ears in this economic climate...or with a perceived crisis in leadership.
Yahoo declined to comment to BetaNews today. Mega-investor and prominent Yang critic Carl Icahn had no comment in his blog. And Microsoft has already tamped down Steve Ballmer's comment about a possible second look at acquisition -- a comment that, ironically, did (temporarily) for Yahoo's stock prices what neither a new front page nor painful staff cuts are likely to accomplish.
The Yahoo quarterly earning call starts at 2:00 pm PDT (5:00 pm EDT) on Tuesday; BetaNews will have coverage. Observers predict the mood will be testy.