NEW YORK (CNNMoney) — Yahoo said Wednesday that it will eliminate 2,000 employees, around 14% of its workforce, as new CEO Scott Thompson begins radically streamlining the company.
The long-rumored job cuts could be the first of several rounds as Thompson pares Yahoo down to focus on what he views as the company’s core business lines. Thompson, who joined Yahoo in January, plans to provide more information about his strategy during Yahoo’s first-quarter earnings announcement, scheduled for April 17.
“Today’s actions are an important next step toward a bold, new Yahoo — smaller, nimbler, more profitable and better equipped to innovate,” Thompson said in a written statement. “Our goal is to get back to our core purpose — putting our users and advertisers first.”
Yahoo said its job cuts will save the company $375 million a year when they are completed. It expects to take a $125 million to $145 million charge this quarter for severance costs.
Thompson is aiming to do something his recent predecessors — including Carol Bartz, who was forced out in September — have repeatedly failed to do: articulate a vision of what Yahoo is.
The Internet’s first giant portal has retained a massive user base, but has lost its edge in nearly every field to newer, nimbler rivals. The company gave up on search in 2009, and it’s losing ground in display advertising to new entrants to the market such as Google and Facebook.