Yahoo dumps 1500 staff but spends $15 million on new building

JUST DAYS AFTER announcing it would lay off 1500 employees, Yahoo is expected to announce it will be setting up a new facility in Nebraska.

The move, expected to be announced at an upcoming press conference this morning by Nebraska Governor Dave Heineman, will apparently bring new jobs to the state. Talk about rubbing salt in the wounds of those Yahoo is now letting go.

In order to take advantage of tax cuts and set up Yahoo shop in La Vista, Nebraska, the firm purportedly had to promise it would create at least 50 jobs at a minimum average salary of $68,700, as well as investing at least $100 million there over the next four years.

Yahoo’s new digs aren’t exactly cheap, either. Apparently the financially flailing Internet portal has already coughed up $14.8 million on the building, which used to be a warehouse. Quite a purchase for a firm which announced it would be trimming $400 million of fat from its gluttonous $3.9 billion in annual expenses next year.

Yahoo’s previous layoffs, in February 2008, which saw 1000 souls given their pink slips didn’t prevent the company from seeing a 64 per cent slump in its third-quarter profits. The February layoffs also seem to have been a fairly futile endeavour, as the firm has managed to hire almost as many people as it had laid off since then.

Yahoo shares were trading higher yesterday as investors gave Yahoo the benefit of the doubt on its cost-cutting plans, but it will be interesting to see how the market will react to this latest development. µ

L'Inq

AP

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