Various analysts predict that Yahoo will soon let go some of its workers if the rumored merger between Yahoo and AOL is sealed. Sources said that Yahoo will announce the layoff scheme as early as next week and will slash around 10% in its product area. The cut will mostly affect Yahoo’s engineers and product managers, who constitute 6,000 of its 14,100 total workforce. In total, around 600 employees are expected to be axed from its engineering and managerial division.

CEO Carol Bartz has been reducing the company costs ever since she became CEO of Yahoo in January 2008. Despite continuous cost-cutting, many were surprised that the Yahoo’s workforce continued to expand since that time. Yahoo had 13,600 employees when she arrived and now has over 14,100. Bartz explained that all the measures she has been employing aimed to increase the revenue growth of the company. “We are in the middle of a big recession. We don’t necessarily have to add people and page views. We just have to deliver a better experience for them.”

A big buzz that AOL was recently in talks with Yahoo officials regarding a merger plan has been surrounding the industry. Reports added that the possible merger is still in the exploratory stage as of the moment. However, there are counter reports that neither AOL nor any private equity buyers have contacted Yahoo to discuss the potential deal. Analysts are still on the look as to what Yahoo’s move will be in the coming days.

Source: http://postcards.blogs.fortune.cnn.com/2010/12/06/whats-next-at-yahoo-layoffs/

http://www.forbes.com/2010/12/06/aol-reportedly-exploring-breakup-yahoo-deal-marketnewsvideo.html

http://blogs.kqed.org/newsfix/2010/12/02/those-yahoo-layoff-rumors-addendum/