SAN FRANCISCO - Yahoo Inc. is reducing its work force 4 percent as it hands out 600 layoff notices for the holidays.
It's the fourth time in three years that Yahoo has resorted to mass firings to boost its earnings.
The company is under pressure to cut costs because its revenue has risen by less than 2 percent so far this year and CEO Carol Bartz has promised to increase Yahoo's operating-profit margin to as much as 24 percent by 2013. The margin stood at about 12 percent through the first nine months of this year.
"Today's personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace," the company said in a statement.
Although Yahoo clearly needed to tighten its belt to widen its profit margin, the timing of the layoffs was horrible, said Gleacher & Co. analyst Yun Kim. "I don't think this is going to score them any PR points," he said.
Yahoo's stock price has been sagging since the company balked at a takeover bid from Microsoft Corp. in 2008. Microsoft's final offer was valued at $47.5 billion, or $33 per share. The company's shares fell 7 cents to close yesterday at $16.63, slightly below their $17.30 price at the end of September 2008 when Yahoo's payroll peaked at 15,200 employees. Yahoo employed 14,100 people before the latest layoffs.