Yahoo Layoffs Today May Not Be the Last

Yahoo began laying off 1,500 workers on Wednesday as part of a plan, announced in October, to slash expenses by $400 million a year. The cost cutting, however, may have to go deeper in the coming year.

“There could be additional staff reductions next year,” said Brad Williams, a Yahoo spokesman. “It depends on the decisions we make about prioritization, and on things we can’t predict in the economy.” Mr. Williams added: “We are trying to instill a culture of cost-discipline in our business.”

Yahoo critics have long said that bloat was far more common than cost discipline at the Internet portal. And when it announced the cuts in October, Yahoo said that further consolidation would be likely, including the closing of some offices and the move of others to lower-cost locations.

On Wednesday, Mr. Williams expanded a bit on those plans. Yahoo is closing offices in Dusseldorf, Hamburg, Stockholm, Amsterdam, Oslo and Copenhagen, he said. Next year, similar closures will be made at smaller offices in the United States and Asia.

Mr. Williams also said that the job cuts today wouldl affect most parts of the company, but that Yahoo executives are still evaluating which projects will be de-emphasized or cut altogether. “This is more of a cost reduction rather than business prioritization,” he said about the layoffs. “Business prioritization will continue going forward. We are looking at businesses we may put into maintenance mode.”

In addition, the company is going to be looking for ways to cut expenses further, by curtailing travel, procurement and other areas.

Yahoo’s chief executive, Jerry Yang, penned a farewell note to laid-off employees on the company’s blog. If you want to know how managers are supposed to notify employees whose jobs are being cut, check out Valleywag.

Many investors say the layoffs were a necessary cost-cutting measure, but argue that a more dramatic change will be needed to turn Yahoo’s fortunes around. On Wednesday, Ivory Investment Management, a Los Angeles-based fund that owns about 21.4 million shares, or about 1.5 percent of Yahoo, urged the board to sell the company’s search business to Microsoft. Other large Yahoo shareholders have also argued privately in favor of a deal with Microsoft, whose chief executive, Steven A. Ballmer, said last week that it remained open to such a deal. A Yahoo board member, Carl C. Icahn, has also spoken in favor of a deal with Microsoft.

Yahoo has also been talking for months with Time Warner about a possible acquisition of its AOL Internet unit. Yet, with Yahoo in the midst of a search for a new chief executive to replace Mr. Yang, it is not clear that a deal with Microsoft or AOL will get done soon — or at all.