Yahoo Begins Layoff Of 2,000 Employees; Severance Could Cost $145M This Year

The Internet company made it official this morning: It has started to tell about 2,000 employees that they’re being sacrificed “as part of an overall plan to reshape the Company for the future,” Yahoo says in an SEC filing. Although Yahoo doesn’t know exactly how much this will cost, it estimates that it will take a pre-tax charge of as much as $145M, most of it to be recognized in the current quarter which ends in June. “The pre-tax cash charge estimate does not include facilities, lease or other charges the Company may incur as part of this action,” Yahoo says. Reports about the firings from the 14,000-plus work force have circulated for weeks, and were expected to focus on the products, research and marketing divisions. Yahoo is struggling to chart a new course amid turmoil at the top with the firing last year of Carol Bartz as CEO and the resignation from the board of co-founder Jerry Yang. Meanwhile hedge fund Third Point is waging a proxy fight to elect four directors to the Yahoo board: Third Point CEO Daniel Loeb, corporate restructuring expert Harry Wilson, media consultant Michael Wolf, and former NBCUniversal CEO Jeff Zucker.