Yahoo! May Lay Off Hundreds of Employees

Battered by slow revenue growth and the popularity of social networking websites, Yahoo! Inc. is poised to lay off hundreds of workers, according to published reports.

The New York Times and The Wall Street Journal have both reported on the slumping Internet icon's cost-cutting plans, citing people familiar with the matter.

Precisely how many of Yahoo's roughly 14,000 employees will lose their jobs hasn't been determined, the newspapers said. A final decision could be announced Jan. 29 when Yahoo executives are scheduled to review the Sunnyvale-based company's fourth-quarter results.

If several hundred employees are dumped, it will mark Yahoo's most extensive layoffs since 2001, when the company was trying to battle back from the dotcom bust.

The payroll purge was first reported over the weekend by Silicon Alley Insider, a blog focused on investments in technology and media. The blog said Yahoo had drawn up a list of 1,500 to 2,500 jobs that could be eliminated, but Monday's reports indicated management doesn't expect the cuts to be that deep.

It won't come as a surprise if Yahoo jettisons workers, said Global Equities Research analyst Trip Chowdhry. He believes Yahoo has room to trim its work force by about 5 percent, or 700 employees, after phasing out some of its services, such as auctions and photos, during the past year.

Besides falling further behind Silicon Valley rival Google Inc. in the lucrative Internet search and advertising market, Yahoo also has been struggling to hold on to younger Web surfers as they spend more time on hip online hangouts like Facebook and MySpace.