Image via WikipediaSAN FRANCISCO (Dow Jones)--Yahoo Inc. (YHOO) said Tuesday it was cutting about 600 jobs, or about 4% of its work force, as the struggling Internet media company strives to increase revenue and boost margins.
Yahoo spokeswoman Kim Rubey said the cuts were largely aimed at the Sunnyvale, Calif.-based company's products group, which builds advertising products, Web properties like the company's popular news, sports and finance pages, as well as its widely used email service.
Most of the jobs cut were in the U.S., she said.
"Today's personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace. We'll continue to hire on a global basis to support our key priorities," the company said in a statement.
The cuts are part of the Internet giant's multi-year effort to streamline operations and cut costs so it can focus on core Web properties and its display-advertising business.
Tuesday's cuts were spearheaded by Chief Product Officer Blake Irving, who is trying to better align the products group with the company's regional units, which are responsible for business development and selling ads in various markets around the world.
In a recent interview, Irving said business teams would often request specific types of products for their regional markets, only to discover the products group was focused on building other types of products and services because Yahoo in the past lacked a company-wide roadmap.
"The product team would do what the product team would do and the regional teams had their own vision," said Irving, a former Microsoft Corp. (MSFT) executive who joined Yahoo in April. "There was a huge amount of friction."
The new structure will cut duplication among teams, as well as reflect the company's decision to eliminate products like trending topics service Yahoo Buzz. Yahoo stressed that it would continue to hire staff to build out its portfolio of local, mobile and communications products and services
Irving also said the product team and the regional teams will be jointly responsible for meeting key business metrics, including the amount of revenue the company makes per search and regional revenue targets, as well as user engagement and user retention data.
But some current and former Yahoo employees, who spoke on the condition of anonymity, said the changes being enacted by Irving were causing confusion within the ranks and have prompted some recent departures by key executives with the products group.
Tuesday's cuts follow two previous rounds of layoffs in recent years. The company cut around 700 workers during the second quarter of 2009, or about 5% of its work force at the time. And it cut about 1,400 employees in December 2008.
The company employed about 14,100 people at the end of October.
Layoffs at Yahoo would stand in stark contrast to other Internet companies, including Google Inc. (GOOG), Facebook Inc., which are competing with each other to hire top notch engineers. Google last month told its more than 23,000 employees they would get a 10% pay raise in January.
Shares in Yahoo closed down 0.4% to $16.63.
