Yahoo cuts jobs as profits tumble

Yahoo revenues for first quarter 2009 are $1,580m

Yahoo chief executive Carol Bartz has announced she will cut the firm’s headcount by an additional five per cent on top of the job losses announced late last year.

The cuts come after Bartz has been with the company six months, taking over from Jerry Yang in a bid to turn the ailing search giant around.

Yahoo’s first-quarter financial results show Bartz continues to have testing times ahead.

Revenues were $1,580m (£1,091m), a 13 per cent decline from the same period last year and a significant decrease from the $1,806m (£1,247m) in revenue posted for the fourth quarter 2008.

Profits also continued to tumble. Net income was listed by Yahoo as $118m (£82m), a 78 per cent decrease from the same period last year and a drop from the $238m (£164m) gain Yahoo reported three months ago.

However, when comparing Yahoo’s current financials with the beginning of 2008, the stark contrast is partly due to a $401m ($276m) gain the firm received because of a stake it had with the Chinese internet company Alibaba.

Despite all this, Bartz is optimistic about Yahoo’s current performance. “Yahoo is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range,” she said.

“While we experienced pressure in both display and search advertising in the first quarter, we believe Yahoo remains one of the most compelling advertising buys on the internet."

In October, at the end of Yahoo’s third quarter, net income was reported to be $54m and Yang announced a 10 per cent cut in the company’s workforce. This was followed by a net income increase to $238m for the company’s final quarter of 2008, even though the fourth quarter also saw Yahoo report a $303m loss since the same period in 2007 when profit was reported to be $206m.