Yahoo Layoffs: This Could Get Ugly - Is Yahoo Just a Canary?
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It’s true that Yahoo has been struggling to find itself seemingly for years, ever since Google became its top competitor. These job losses, whether they happen all at once or with multiple cuts over time through both layoffs and attrition, are just the latest in a long, seemingly futile battle. The whole point of the layoffs, regardless of the area(s) they hit hardest, is that Yahoo needs to redefine itself if it hopes to avoid going the way of AltaVista.
Or is something else going on here? Many media outlets were reporting fears that the U.S. is entering a recession as far back as October. Earlier this month, the International Herald Tribune even quoted Jan Hatzius, the chief U.S. economist for the investment bank Goldman Sachs, as saying that “Recession has now arrived or will very shortly,” though his company figures it will be a mild recession contraction that lasts only two to three quarters.
Over at Search Engine Roundtable, some have a feeling that this is the start of a trend at Internet companies – that the bubble may be about to burst once again. If so, that would position Yahoo, with a massive round of layoffs, as the canary in the mineshaft, warning the rest of the miners to get out – or rather, warning the other Internet companies that hard times are ahead once again.
Here is some food for thought along those lines:
It’s a chart from Yahoo Finance that shows the ups and downs, percentage-wise, of two stocks over a three-month period: Google (in blue) and Yahoo (in red). One needs to look at many other indicators to see whether we’re entering a recession, even for a particular sector of the economy, but this is at least tantalizingly suggestive. Yahoo has quite a fight ahead of itself: strong competitors, a necessary reorganization after a rather messy period internally, and a possible recession on the horizon. It survived the first dot-com bubble, but it will need all the luck in the world for the months ahead.
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