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Yahoo to Can 2,000

The layoffs are supposed to save the company $375 million a year

Yahoo said Wednesday morning that its restructuring would cost an initial 2,000 Yahoos their jobs. That's ~14% of its workforce. The pink slips are just going out and further cuts are thought to be in store for the company.

In a statement CEO Scott Thompson said, "Today's actions are an important next step toward a bold, new Yahoo! - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose - putting our users and advertisers first - and we are moving aggressively to achieve that goal. Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo!."

Thompson doesn't share in the press release exactly what he thinks Yahoo's core properties are, where new "disciplined" investments might be or whether he's going to sell off some of Yahoo's assets, but promised a "clear focus on profitability and growth." He also didn't say who would be hit or how advertisers would take to the overhaul. Ad sales have reportedly stabilized.

The company last month promised "significant strategic change."

The layoffs - which the All Things Digital blogs says will hit the product division, marketing, research and international units the hardest - are supposed to save the company $375 million a year. It will take a $125 million-$145 million pre-tax charge in its second quarter.

Yahoo claims nearly 700 million users. In his statement Thompson mentions "the data that drives deep personalization for users and ROI for advertisers." Undoubtedly it's code for how Yahoo plans to deal with Facebook's ad threat.

The gist of the new organization is supposed to emerge next week.

Yahoo also has a proxy fight on its hands.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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