Don't expect Yahoo gory layoff details yet

The company will discuss, but not detail, its layoff plan Tuesday as it reports financial results. But don't expect cuts as deep as 3,500 as some suggested.

Yahoo will shed some light Tuesday on a coming layoff and cost-containment plan as the company details third-quarter financial results, but likely only the broad elements of the plan, according to a source familiar with Yahoo's plans.

Yahoo headquarters in Sunnyvale, Calif.
Yahoo headquarters in Sunnyvale, Calif. Stephen Shankland/CNET News.com

The company isn't likely to disclose much detailed information, for example, about whether it plans to cut specific programs or to cut across the board. So investors eager to know just how much faith to put in Yahoo's grim stock price in light of the measures might have to keep on waiting. Yahoo, which has pinned the layoffs on the prevailing economic troubles, hired Bain & Co. to help it come up with a plan.

One thing is likely, though--reductions won't surpass the 3,000-plus range prescribed by Silicon Alley Insider's Henry Blodgett and forecast on Valleywag. The Wall Street Journal on Sunday reported an expectation of cuts exceeding 1,000 .

Yahoo declined to comment for this story.

Time is of the essence here, and investors aren't patient. Microsoft's attempt to acquire Yahoo pushed its stock close to $30 per share, but it sunk down to the pre-Microsoft offer price of $19.18 after the deal fell apart. With the economic problems that blossomed afterward, though, Yahoo has suffered even more, and its stock on Monday closed at $12.86 per share.

And economic troubles have made it harder for Yahoo to benefit from other avenues such as selling off its Japanese business unit or acquiring AOL's online properties from Time Warner.

"The value of Asian assets has fallen to $4.68 per share (versus $7 in July) due to global market volatility, and the window to effectively monetize these assets may have closed for the near term," Canaccord Adams analyst Colin Gillis said in a report Monday. "An acquisition of AOL is interesting, but consolidates Yahoo's strength into display advertising--a segment that is weak."

Yahoo's best possibilities right now are the search-ad deal with Google , delayed some to allow further antitrust review, and an acquisition, Gillis said.

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About the author

Stephen Shankland has been a reporter at CNET since 1998 and covers browsers, Web development, digital photography and new technology. In the past he has been CNET's beat reporter for Google, Yahoo, Linux, open-source software, servers and supercomputers. He has a soft spot in his heart for standards groups and I/O interfaces.

 

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