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Yahoo! to cut 12% of staff, reports Q1 profit slide

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Yahoo! today announced plans to cut around 12 per cent of staff after seeing profits slide for the first quarter.

As the Internet portal struggled with falling advertising revenue, it posted a pro-forma net income of $7.6 million for the quarter ended March 31 2001, or one cent per share. This was way down on the $60.5 million profit, or 10 cents per share, it reported for the same period last year.

Sales at the US dotcom fell to $180.2 million from $230.8 million.

The company also announced it would lay off around 400 employees in the next 30 days. Meanwhile, Heather Killen will leave her post of senior VP of international operations in mid-June.

For the second quarter, the dotcom said it expected to post results that would show anything from a loss of $10 million to a point where it would break even. It will take a charge of between $40 million to $60 million in the quarter.

For the full year, profits were expected to fall at between break-even and $50 million.

Sales for Q2 were forecast at between $165 million and $185 million, with $700 million to $750 million expected for the full year 2001.

Yahoo! CEO Tim Koogle said in a conference call the company found itself in a "challenging" and "temporary" situation, but that its "asset base, focus and resolve" would get it through. Koogle's own position at the dotcom can also be described as "temporary" - last month Yahoo! announced he would step down as CEO. A replacement has not yet been found.

The company, which said it had 1.1 billion average daily page views and 192 million users, had prepared investors for the Q1 figures by issuing two revenue warnings this year. On March 7 it cut sales forecasts to between $170 million and $180 million. This followed January's announcement, when it reduced sales forecasts to $220 million to $240 million. ®

Related Link

Yahoo! Q1 statement

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