Yahoo to Cut 1,000 Jobs; Names CTO, Signs Ad Deal with AT&T

Authored by Mark Hefflinger on January 30, 2008 - 8:37am.

Sunnyvale, Calif. - Yahoo (NASD: YHOO) said yesterday that it will lay off 1,000 employees, or about 7% of its staff of 14,300, as part of a company realignment, after reporting that its fourth quarter profit was down 23%. The company said it would take a charge of between $20 and $25 million to pay for costs associated with the layoffs, which along with other cost-cutting measures are expected to reduce its annual expenses by over $100 million.

Yahoo also announced the appointment of Ari Balogh as chief technology officer, replacing Farzad Nazem, who left the company in June; Balogh was formerly CTO at Verisign.

Separately, Yahoo announced a new multi-year advertising agreement with AT&T (NYSE: T), with whom it offers a co-branded high-speed Internet service.

Under the deal, Yahoo will no longer receive guaranteed revenue from each broadband subscriber, but will instead share advertising revenue with AT&T.

The new terms call for AT&T to make an up-front payment of between $300 million and $400 million to Yahoo.