Yahoo Inc., owner of the second- most popular U.S. search engine, said Tuesday it will cut hundreds of people from its work force after reporting a 78 percent drop in first quarter profit.
Sunnyvale, Calif.-based Yahoo said first-quarter net income fell to $117.6 million or 8 cents a share, from $536.8 million, or 37 cents a share in the same period a year earlier. Net revenue fell to $1.2 billion for the period ended in March.
The company said it intends to tell 5 percent of its employees they will lose their jobs, which is equivalent to around 600 to 700 people.
“Yahoo is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range,” Ms. Bartz, the chief executive, said in a news release.
The Sunnyvale search and advertising business earned $117.6 million in the quarter, down from a profit of $536.8 million a year earlier in the same period.
Advertising sales plunged to $1.58 billion from sales of $1.82 billion a year earlier.
Bartz received a salary of $1 million and her total hiring package was worth as much as $20 million in the first year. Bartz took over the reins of Yahoo at a difficult time after being offered an unsolicited $47 billion takeover bid from rival Microsoft Corp. while also facing increased internet search competition from Google.
Shares of Yahoo fell slightly in after hours trading following the earnings announcement.