Troubled Yahoo expected to announce 2000 layoffs

By Rachel Hand topicIcon Internet News

Yahoo workforce decimated

Former search giant Yahoo is expected to announce massive job cuts later today.

According to AllThingsD, the struggling company will sacrifice up to 2,000 staff in the latest rescue attempt. This amounts to 14 per cent of its total workforce. It has not been confirmed which areas of the company will be affected, but analysts are predicting the marketing, research and product divisions will be hit hard.

The news comes in the wake of another major blow for Yahoo: Facebook has launched legal action against the company for infringing 10 patents. Just last month Yahoo accused Facebook of patent infringement, and now it seems the social network is countersuing. The areas under dispute include photo tagging, recommendations, and online advertising - one of Yahoo's principle sources of income. However, the BBC points out that while Yahoo owns around 1,000 patents, Facebook had just 56 at the end of 2011, in addition to the 750 acquired from IBM in March.

Thompson's troubles

It seems Yahoo's new CEO Scott Thompson has rather a lot on his plate. The former PayPal executive hoped to turn around the company's fortunes, but has already had to deal with founder Jerry Yang's resignation and the failed sale of Yahoo's stake in Alibaba. Thompson is also under pressure from shareholder Third Point, led by Daniel Loeb - who this week set up, a website campaigning for new directors at the company.

Richard Frost, managing editor at theEword, said: "Yahoo has had a nightmare start to 2012, and it's hard to see how Thompson can rescue the company faced with so much pressure from all angles. However, decimating the workforce like this may do more harm than good, especially in terms of the company's reputation."