Yahoo glum amid cuts

BURBANK — Yahoo Inc. has begun laying off more than 1,500 workers around the world, including an undisclosed amount at its Burbank campus on Empire Avenue, the Internet giant announced Wednesday.

The action follows Yahoo’s October promise to slash 10% of its global workforce to cut $400 million a year in costs as the company struggles against bleak earnings estimates and weak revenue figures.

“We have begun to notify impacted employees,” spokesperson Brad Williams said. “The majority of them will be notified today.”

Williams would not reveal the extent to which Burbank or other regional Yahoo locations will be affected, but the company employs about 1,000 at its 3333 Empire Ave. campus.

Yahoo has not announced further employee cuts this year, but Williams said that the company is open to laying off more workers as economic conditions warrant.

“It’s hard to predict how market conditions might impact the need to make further cuts,” he said. “We’re open to it but there are no specific plans.”

The company could also consolidate its regional campuses or close offices altogether, though there are no plans to close Burbank’s office, he said.

City officials plan to speak with Yahoo soon, hoping to press the company on the importance of maintaining a presence in Burbank. But given the city’s own precarious financial standing, including an up to $7-million deficit projected for next fiscal year, could limit Burbank’s mobility to offer Yahoo any monetary incentives.

“I’m not sure as a city we can stem the tide of layoffs . . . but we will look at seeing what we can do,” Mayor Dave Golonski said. “Everybody is affected by this. We hope they don’t close the [Burbank] office, and we’ll be in touch with Yahoo and make sure we’re doing everything we can to keep them here.”

Wednesday’s layoffs were done just two days after Yahoo filed federal- and state-mandated notices, called the Worker Adjustment and Retraining Notification, usually required of companies 30 days before they intend to lay off more than 50 workers at once.

The company filed the notices with the Employment Development Department on Monday, Williams said.

Yahoo may have gotten around filing the 30 day advance notices by offering severance packages to laid off employees, state government officials said.

“They may have offered severance packages that people voluntarily took, which is not considered laid off,” said Patti Roberts, a spokesperson with the Employment Development Department.

Other California offices affected by the action include campuses in Santa Monica, Sunnyvale and Santa Clara.

Yahoo has had a troubling year as it seeks to carve out a niche for itself among other Internet companies, namely Google and Microsoft, the latter of which offered to buy Yahoo in April for $44.6 billion, or $31 per share.

On April 12, Yahoo laid off 111 workers from its Burbank site and 333 others at its California offices.

Since then, Yahoo’s stock value has lost more than half its value.

But news of Wednesday’s layoffs sent stock prices soaring nearly 10% to finish at $13.40 per share, their highest point since Oct. 9.

Former Yahoo workers outside the Burbank campus Wednesday, hours after they were handed pink slips, said the mood inside the Empire Avenue site was gloomy.

None wanted to be identified, citing concerns about future employment prospects, but said many of the workers were notified individually early Wednesday morning by superiors.

Some workers were offered severance packages, and most received case management help from a transition team Yahoo established to help workers move on from the Internet company, employees said.

Still, morale was very low inside the search engine’s Burbank hub, which was established in 2006 to provide search products and services to advertisers, one worker said.

“Everybody’s built a wall. Nobody’s talking to anyone else,” she said. “It wasn’t pleasant.”

In preparation for a potential glut of new unemployed workers, the Burbank WorkForce Connection job resource center has started ramping up its efforts to respond to the needs of high-tech job seekers.

“We are ready to have more people coming in,” said Rene Sanchez, a human resources technician with the job center. “A lot of companies are going out of business, and we’ve had some rapid response meetings.”


 JEREMY OBERSTEIN covers business, politics and the foothills. He may be reached at (818) 637-3215 or by e-mail at jeremy.oberstein@latimes.com.

Copyright © 2019, Burbank Leader
EDITION: California | U.S. & World
66°