Yahoo is struggling to remain viable after failed negotiations with Microsoft ultimately led to then CEO Jerry Yang being replaced by Carol Bartz. Since Yang's departure, Bartz has been looking at all aspects of Yahoo's business for areas to reduce costs.
Among the first places that costs were cut was in jobs with Yahoo slashing 1,600 jobs in October. Yahoo has now announced that it will be cutting an additional 5% from its global workforce of about 13,600 workers.
Yahoo reports that the economy remains challenging for it and that revenues from display and search ads have fallen during the first quarter of 2009. The decline in revenue was offset to some extent by the improved cost controls being implemented. Analyst Jason Avilio from Kaufman Brothers said, "People were really looking at the profit structure of the business and for things not to be falling apart."
Reuters reports that an internal Yahoo memo circulated this week told employees that Yahoo would be implementing a mandatory shutdown of operations during the holiday week from December 25 to January 1, 2010.
Yahoo reports revenues, excluding certain items, for the quarter were $409 million. Yahoo shares were up by 54 cents to $14.92 in after-hours trading Tuesday. Part of the reason for the increased stock price is that Yahoo is rumored to be back in talks with Microsoft over a merger of the two company's search operations. Bartz declined to comment on any current merger talks with Microsoft.
During Bartz's first full quarter at the helm of Yahoo, the company generated $1.58 billion in revenue, down 13% from the same quarter of 2008. When traffic acquisition costs were taken from the revenue numbers, Yahoo generated $1.16 billion in revenue while analysts had predicted revenue of $1.2 billion.
Yahoo blames the 13% slide in advertising revenues in part on advertising from automotive manufacturers being down significantly.