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Fewer Yahooligans

By Rick Munarriz - Updated Apr 5, 2017 at 8:01PM

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Layoffs are back at Yahoo! 

The "start wearing purple" company is getting busy with the pink slips.

"Today, most of our layoffs in the US are happening, and they've been under way in other regions around the world," Yahoo!'s (NASDAQ:YHOO) lame-duck CEO, Jerry Yang, said in an email sent to his employees Wednesday.

"The reductions we're making are very hard, but they are also very necessary -- as we focus on the long-term health of our business," he wrote.

The layoffs aren't taking the company by surprise. Officials announced that Yahoo! would lay off "at least" 10% of its workforce after it posted lackluster third-quarter results back in October. Even though the company already set a problematic precedent of announcing layoffs, only to fatten up its workforce a few months later, it probably means it this time.

Trimming payroll has become contagious as companies brace for a weakening economy.

  • AT&T (NYSE:T) may be selling a ton of 3G iPhones, but it's still cutting 12,000 jobs, or 4% of its staff, this week.
  • TiVo (NASDAQ:TIVO) may be brokering a slew of content deals, but it too is hitting the rewind button on its head count.
  • Viacom (NYSE:VIA) may have its MTV, but the Nickelodeon parent is letting go of 7% of its employees.

Even Yahoo! slayer Google (NASDAQ:GOOG) has been long rumored to be eliminating as many as 10,000 jobs.

Yahoo! didn't necessarily need to whack away at its payroll. The company is still squarely profitable and has plenty of cash on its balance sheet. However, the cold reality is that Yahoo! has a business to run. Dismissing "at least" 1,520 hires isn't going to help morale, but it's one step in creating a leaner cost structure to deliver the results that stakeholders expect.

When you also consider that Yahoo! finally revised a controversial severance clause that would have made a takeover more expensive, conspiracy theorists may even presume that Yahoo! is just dolling itself up to make itself more attractive for a suitor.

"I see you've lost a little weight," Microsoft (NASDAQ:MSFT) may say. "Gee, and you've become a cheaper date, too."

Other Microhoo headlines:

Microsoft is an Inside Value recommendation. Google is a Rule Breakers pick. If you've got hunger pangs, a 30-day trial to any of the newsletter services is available to feed your appetite for superior market advice.

Longtime Fool contributor Rick Munarriz is a fan of Yahoo! and Microsoft but not of bad weddings. Hdoes not own shares in any of the stocks in this story, save for TiVo. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$293.47 (0.53%) $1.56
Alphabet Inc. Stock Quote
Alphabet Inc.
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AT&T Inc. Stock Quote
AT&T Inc.
T
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TiVo Corporation Stock Quote
TiVo Corporation
TIVO

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