Yahoo responded to a 13% year on year drop in revenues and an 80% fall in net income by slashing 5% of its 13,600 employees. The company reported revenues of $1.58 billion compared to $1.8 billion in the first quarter of 2008. The company said that 5% of that was down to currency fluctuations and that otherwise the fall would have been 8%.
The 600 plus employees set to leave the company are expected to be notified within the next two weeks
Yahoo revenues were hurt by currency fluctuations, the sale of Kelkoo and lower fees revenues from broadband partnerships, voice-over IP services and subscription music offerings. Without those falls, revenues would only have been off 3% the company said.
Last year’s net income figure inflated by a non-cash gain of $401 million, related to Alibaba Group’s initial public offering
The new CEO Carol Bartz said ‘Yahoo is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range.’
She talked about margin pressure in both display and search advertising but said that things would get better as the advertising industry resumes growth.
Free cash flow for the first quarter was $214 million, down 67% but last year this included a $350 million one-time payment from AT&T. The company still has cash of almost $3.7 billion