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Yahoo reportedly preparing big restructuring, layoffs

Fred Prouser / REUTERS

A Yahoo sign is shown in Burbank, Calif.

By msnbc.com staff
Yahoo’s new CEO Scott Thompson is preparing a massive restructuring of the Internet search firm, including layoffs that are likely to number in the thousands, according to the news website AllThingsD.com.


Citing “multiple sources both inside and outside the Silicon Valley Internet giant,” the report said the restructuring, which could be announced as soon as the end of this month, is “being aimed at Yahoo’s large products organization, as well as other arenas in which the company has lagged in.”

These units include public relations and marketing, research, marginal businesses and weaker regional efforts, the website said.
In an e-mailed statement to msnbc.com, Yahoo said:
“As we have indicated, our leadership is engaged in a process that will generate significant strategic change at Yahoo, but final decisions have not yet been made at this point. Beyond that, we will not comment.”
Ben Schachter, an analyst at Macquarie Capital who follows Yahoo, said any plan to overhaul Yahoo is the right move as the company needs “radical transformation” right now.

“This is a company that has to do something,” he told CNBC Monday. “The world is changing; people are moving to use the Internet in different ways than they have in the past, and Yahoo really needs to transform their business if they’re going to be there in the future.”

There can be a future for Yahoo, he said, provided that the company can revamp its operations and respond to changing user habits.

“But nobody is going to give this company the benefit of the doubt,” Schachter added. “It has been trying to transform itself for a long time. We shouldn’t assume they’ve solved their problems just because they’re firing people.”

New CEO Thompson is the right person for the job of turning around Yahoo, he continued. He did a great job in his former role at Paypal, and he will likely focus Yahoo on e-commerce, Schachter said.
Thompson has led a quick push for change at Yahoo since his appointment at the start of the year.
Most controversially, he has threatened patent litigation against Facebook. Yahoo recently warned the social network that it will face legal action if it refuses to sign licensing deals for patents Yahoo believes Facebook is using for its advertising systems.
Thompson also played a role in how Yahoo should sell its Asian assets back to partners there, and he appears to be looking widely across Yahoo in order to jump-start what has largely been a failed turnaround for the company under previous leadership, AllThingsD.com said.
Once a model Internet company, Yahoo has struggled in recent years. Former CEO Carol Bartz was fired late last year and replaced by ex-PayPal chief Thompson. Co-founder and former CEO Jerry Yang left the company in January. 

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