Yahoo! may be planning significant layoffs

Yahoo, Inc. (NASDAQ: YHOO) will report its fiscal year come January 29, and along with probably reporting a profitable, but slow-growth year, the company may also announce employee cutbacks at the same time. Yahoo!, which has about 14,000 employees, may be looking to shed itself of 1,500 to 2,500 of them.

This may be a way to pacify the investment community, which has very little patience for Yahoo!'s financial results after consistently losing revenue market share to Google, Inc. (NASDAQ: GOOG). Additionally, many are upset about the huge pay package former CEO Terry Semel received after leading the company to quarter after quarter of disappointing results.

Although one source indicated the number of potential Yahoo! layoffs would be in the thousands, a number set in the hundreds was indicated by another source. One thing is for sure -- Yahoo! is most likely set to announce some kind of headcount reduction in the next week or two. Since 2006, the company has grown from 11,600 employees to more than 14,000 today -- an over 23% growth. At the same time, share price has declined from near $35 to a little over $20 today. It's doubtful that YHOO shares will rise during the rest of this month seeing as the massive decline in the market is happening this morning (and will continue for the remainder of the month most likely).

Still, Yahoo!'s Q4 revenue growth is being estimated at 15%, something that can be looked at as a large positive. However, Yahoo!'s CEO Yang will continue to feel pressure to cut more costs in the short erm, and that means layoffs are in order soon unless the company can pull something significant from its magician's hat.