Blog Post

Yahoo announces third round of layoffs


Yahoo is announcing another round of layoffs today. While not a huge amount of jobs in comparison to the corporate giants who have been slicing their workforce by the thousands, a few hundred jobs at Yahoo is a big deal given their size. This is the third round of workforce reduction that Yahoo has done since their change in leadership at the search engine company last year.

Starting in 2006, Yahoo saw profits starting to shrink due to loss of end-user search engine market share. I've been blogging for a long time that Google owns 85% of the search engine volume. But I saw a recent study that suggested the percentage of Google's share is now at 90%. This is bad news for Yahoo, the number 2 search engine on the Internet. Google's revenues are about three times that of Yahoo.

Additionally, with the deep recession in the US and around the world, businesses of all shapes and sizes are cutting back on Internet advertising spend rates. While some have suggested that online marketing will not be impacted due to the relatively high ROI, I think it's more appropriate to suggest that online marketing budgets may be impacted the least - but will still decline. Even Google has discussed slowing revenues with their share holders over the last 6 months. Despite their search engine dominance, Google made the decision in the first quarter to layoff several hundred employees in an attempt to contain costs in the face of declining Internet ad revenues.