Yahoo shrinks to grow

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Yahoo shrinks to grow

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Yahoo is to lay off 2,000 people, that is 15 percent of its workforce.

The web company’s deepest round of job cuts in years come as new chief executive Scott Thompson tries to drive innovation within a leaner, more agile company.

The target is to save the equivalent of 285 million euros annually from the cuts

Yahoo’s revenue has been declining due to competition from rivals Google and Facebook.

Some analysts were sceptical about the layoffs, which had been widely expected.

“You can’t cut your way to revenue growth,” said Colin Gillis of BGC Partners. “What people want to see out of Yahoo is they want to see a plan and provision for revenue growth.”

But at Macquarie Research, Ben Schachter saw the layoffs as a start in determining the new direction of the company.

“Scott Thompson is not there to tweak the business,” Schachter said. “He saw something in the assets to make him think there was potential.”