SAN FRANCISCO (Reuters) - Yahoo Inc said on Tuesday it will cut 4 percent of its workforce, as the struggling Web portal adjusts its operations to revive revenue growth.
Yahoo will lay off about 600 employees, mostly in its product group, and began notifying them on Tuesday, spokesperson Kim Rubey said.
The company will continue to hire globally to support key priorities, it said in a statement.
The cuts come nearly two years into the tenure of Chief Executive Carol Bartz, who joined Yahoo in January 2009. Yahoo has managed to boost profit margins under Bartz’s watch, but revenue growth has stalled and page views at Yahoo’s network of websites declined 4 percent year-over-year in the third quarter.
While Yahoo remains one of the world’s most popular online destinations, the Web portal is facing increasing competition from Google Inc and social networking powerhouse Facebook. A new generation of online advertising exchanges are also pressuring Yahoo’s sales of premium online ad space, according to analysts.
“Today’s personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion,” Yahoo said in the statement.
The company is offering severance packages and outplacement services to the affected employees, it added.
Yahoo had 14,100 employees as of the end of September, according to the company’s website.
Yahoo recently began using Microsoft Corp’s back-end technology to power its Web search service, as part of a 10-year partnership the two companies struck in the summer of 2009. As part of the partnership, certain Yahoo employees were transferred to Microsoft.
A source close to Yahoo said Tuesday’s layoffs were not related to the Microsoft search partnership employee transition.
Shares of Yahoo closed 7 cents lower at $16.63 on Nasdaq.
Reporting by Alexei Oreskovic; Editing by Gunna Dickson and Richard Chang