Ailing Yahoo to chop work force by 1,000

BEIJING, Jan. 31 (Xinhuanet) -- Yahoo Inc.'s financial crisis deepened at the end of 2007, forcing the slumping Internet icon to lay off as many as 1,000 workers.

    The Sunnyvale-based company disclosed the upcoming 7 percent reduction in its 14,300-employee work force Tuesday while reviewing a 23 percent drop in fourth-quarter profit and a cautious 2008 outlook. The bad news sent Yahoo shares sliding to their lowest levels in more than four years.

    In a prepared statement, Yahoo Chief Executive Jerry Yang warned of looming "headwinds," indicating that the company's turnaround efforts aren't likely to be effective off this year.

    "I'm surprised by how slowly they seem to be moving," said Cantor Fitzgerald analyst Derek Brown. "Yahoo still has quite a bit of work ahead."

    Yahoo shares dropped 2.09 U.S. dollars, or more than 10 percent, in extended trading Tuesday after finishing the regular session at 20.81 dollars, up 3 cents. The company's market value has plunged more than 50 percent since the end of 2005, wiping out 35 billion dollars in shareholder wealth.

    Yang, Yahoo's co-founder, took over as CEO seven months ago in an attempt to shake things up, but his overhaul hasn't impressed Wall Street so far. The mass firings represent Yang's most dramatic move yet.

    Yahoo didn't specify which areas of its operations will be trimmed in the company's biggest purge since jettisoning 650 workers in the aftermath of the dot-com bust seven years ago. Management indicated some employees whose current jobs are eliminated may be offered new assignments in other parts of the company. Further details are supposed to be released by mid-February.

    Yahoo expects to absorb a first-quarter charge of 20 million dollars to 25 million dollars to pay for severance costs and other expenses incurred in the layoffs.