Troubled Web portal Yahoo will cut 400 jobs as part of a restructuring plan meant to diversify the company away from its dependence on advertising revenue. Another 100 new employees will be hired to help staff new strategic projects, said President and Chief Operating Officer Jeff Mallett, during a meeting with analysts Thursday which was broadcast over the Web.
"We think we've done the hard stuff," he said.
Yahoo had 3,256 employees as of September 30, 2001, according to the company Web site, so the job cuts will trim about 12 per cent off the company's workforce.
The company plans to narrow its focus from a current 44 business categories down to six: listings, access, commerce, communications, media and information, and enterprise, said Mallett.
Of the jobs cuts, 75 per cent will come from Yahoo's international and broadcast businesses and among management; the remainder from sales, marketing, and support staff. It is likely this will include its Australian operations. "We won't know for another three weeks or so, though it is likely we will be affected," said a spokeswoman for Yahoo Australia.
The new plan calls for Yahoo to continue to offer free content, but to complement it with fee-driven services, said Terry Semel, who joined Yahoo as chairman and chief executive officer in May, after spending 24 years at Warner Brothers.
"There is nothing wrong with advertising revenue ... we believe in it, but you will see that this will be a much more diversified company," he said.
Currently advertising accounts for some 80 per cent of Yahoo's revenue, but Semel said his goal is to reduce that to 50 per cent by 2004.
The restructuring plan was widely anticipated, after Yahoo released revenue results for the third quarter that were down by almost half compared with the same period last year.