Yahoo! Cuts 2,000, Lawsuit against Facebook Begins

As part of the change at Yahoo, they announced today that roughly 2,000 people with be terminated or phased out from their daily activities. The intention is to focus their efforts on maintaining true to their core competencies of growth and profitability. The heaviest losses will come from Yahoo’s product division – the division run by Blake Irving the overseer of consumer and advertising products. The cut is projected to save from upwards of $375 million a year, which half of this will be seen in this second-quarters financial result. Yahoo currently employs over 14,000 people and thousands of outside contractors. This big move is part of a transition brought upon by new CEO’s Scott Thompson plan to bring “real change” to the company

Yet, Yahoo still has a solid foundation with thousands of internet marketing companies and millions of users. With the new corporate restructuring, Yahoo says that they will, “grow by responding more quickly to customer needs and competing more effectively in areas where it can win”. This likely means no more jumping into projects because everyone else is, instead as Yahoo states, they will focus on their “identified key parts” that stick more closely to their core – where ROI for marketing companies is plentiful and users feel a personalized touch.

On the other side, Google and Facebook hired more engineers and sales representative to their product development and sales team. Last year Google added 8,000 employees, and Facebook moved their HQ to Menlo Park, Calif. for the highly anticipated tripling of their current workforce of about 3,200 people within the next few years.

While the firings took place, Yahoo has also begun battling Facebook after filing 10 patent violations against Facebook. In return, Facebook has accused Yahoo of violating their technology patents as well.

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