Contentinople - Erin Barker - News Bits: Yahoo Might Lay Off 3,000

Written by Erin Barker

Friday, October 17. 2008 at 11:20 AM EDT Post a comment

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Bain & Co. , the management consulting firm hired by Yahoo Inc. (Nasdaq: YHOO), has recommended that the company lose 20 percent of its workforce -- or 3,000 employees, according to a story that popped up ever so briefly on CNN Money yesterday.

Fortune's Techland blog had reported the story before removing it later that day. An excerpt from their post, reported by ValleyWag:

A management consulting firm hired by Yahoo to streamline the company is recommending that the Internet portal eliminate 20% of its workforce, or about 3,000 employees, according to a person familiar with the situation.

If the story is true, the estimate is in line with Silicon Alley Insider's Henry Blodget's analysis from September: "Yahoo needs to fire about 3,000 more people and cut a similar amount of non-headcount cost. This will slice about $250 million of fat out of Yahoo's quarterly expense tab, for total annual savings of about $1 billion."

ValleyWag had reported on Wednesday that "a source inside the company" has said Yahoo will layoff 3,500 employees on Dec. 10.

In other news:

Speaking of Yahoo-related take-back news: Microsoft Corp. (Nasdaq: MSFT) CEO Steve Ballmer expressed yesterday that he would still be interested in acquiring Yahoo, saying: "We'd be glad to buy Yahoo. Of course we're not paying what we would have paid before because Yahoo's stock has collapsed. We also imagine that Yahoo's management is still hallucinating about the value of the company, in which case we have nothing to talk about. In the event that they have come to their senses, however, they should give us a call." An hour later, Microsoft hastily explained that by "glad to buy Yahoo," Ballmer actually meant "no interest in acquiring Yahoo."

MySpace expects its earnings to hit the $1 billion mark this year, despite economic downturn, VentureBeat reports. This is compared to the $300 million expected by Facebook , which actually exceeds MySpace in traffic. MySpace, which is in its fifth year, also looks to be making progress more quickly than Google (Nasdaq: GOOG), which took six years to hit $1 billion in sales.

Tags: Acquistions, Business, Microsoft, MySpace, Yahoo

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