Gauging the Impact Of Yahoo's Imminent Layoffs
Some have pegged the number at about 500 layoffs, while others have speculated 1,500 or more (roughly 10% of the Web giant's workforce). Erick Schonfeld says that while it may be hard to stomach axing that many dedicated Yahoos, making too few cuts will do nothing to bolster the tanking stock, and may actually worsen morale.
Schonfeld estimates that at a hypothetical (but plausible) $100K per head, slashing the workforce by 1,500 would net Yahoo about $150 million for the year--equal to the Web giant's entire net income in Q3 07. Still, if Yang & Co. cut too deep, it may keep shareholders happy, but at the expense of stifling Yahoo's future growth. Talk about a rock and a hard place.