BUSINESS BLOGS
BUSINESS BLOGS
category: business
21 Jan 2008
related tags: Yahoo! |

Yahoo! is contemplating laying off 20% of its workforce, maybe.

It turns out that CEO Jerry Yang is not actually going to lay off 20% of the workforce, rather, depending on how the stock market reacts to Yahoo!’s Q4 2007 report, then Yang and the Board will make a call.

Hmm… as a Yahoo! stockholder, this is lunacy and it makes me angry at Yahoo!, Yang and the Board (if it is true).

Like a band-aid, Yang needs to rip this off with little hesitation or trepidation. It is long overdue.

Unlike a band-aid solution however, a 10-20% layoff is just what the doctor recommends for long-term health.

As I mentioned earlier this morning, this entire rumor is odd, but suggests a few things:

- For Yang and YHOO’s mgmt to think that the stock might edge up after the reports suggest that Q4 was relatively good. Otherwise, they would definitely time the layoffs with the report. So net-net, that is a positive.

- But, that is not how the market works. This rumor, true or not, is out there, the information should make the stock bump up a bit (no big feat given that YHOO is now a $27B company). I fear that if the company backs away from the layoffs, the market will punish the stock. Unless, of course, traders understand this is merely a rumor about the thought of layoffs.

My two sense: YHOO is a great company, but a mature one. It’s about time Yahoo! cleaned up shop, especially at the very top… in the middle and at the bottom too. The company’s fat, slow, it’s time to go.

Yahoo! could very well survive and thrive alone - online ads will double in 3 years and YHOO is the biggest site online - but it is a bit troubling that Jerry Yang and the Board are seemingly going to let the market decide the fate of the company after the results are reported. I sure hope that is a rumor and not what the company actually plans to do.

You don’t manage according to Wall Street, Jerry, you just don’t!