“Today’s personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace,” the company said.

The reductions underscore the purple portal’s failing fortunes at a time when many of its direct competitors — including Google, Facebook and fellow also-ran AOL — are booming. The market for tech talent is so hot, a virtual market for soon-to-be-former Yahoo employees has already sprung up on recently launched question-and-answer site Quora.

Yahoo spokesperson Kim Rubey told Reuters that the company would be laying off about 600 employees, or 4 percent of its total workforce of 14,100 employees.

The one-time internet pioneer has fallen on hard times over the last few years, thanks to mismanagement, bureaucratic inertia and a series of unsuccessful merger moves. Yahoo famously spurned Microsoft’s more-than-$30-per-share offer — a move which seems ill-considered in hindsight. In 2008, Microsoft offered $45 billion for Yahoo. The portal is now worth about $21 billion by market capitalization.

Despite that, the company remains very popular with internet users. Yahoo’s homepage remains an immensely popular destination. Yahoo e-mail is the most widely used online e-mail service in the United States, and its finance, sports and celebrity news sites are also category leaders. And the company has made an impressive foray into premium journalism.

Still, despite those positive developments, the company continues to struggle.

Analysts said the staff cuts are necessary as Yahoo seeks to implement a turnaround plan under CEO Carol Bartz, who in nearly two years has failed to gain much traction amid management turmoil that has seen numerous top executives voluntarily head for the exits.

“I think the No. 1 issue that she’s had to face is that Yahoo was a sinking ship with or without her,” said Gleacher and Co. analyst Yun Kim. “She just hasn’t been able to turn it around fast enough. It didn’t help that a lot of the senior executives have already left.”

Kim says he’s neutral on the stock, which is trading at around $16 per share.

While Google rolls out a blizzard of new products, including a new web-based operating system, Yahoo appears stuck in an identity crisis.

“Clearly there are structural issues with this company,” said Ben Schachter, who covers Yahoo for Macquarie Securities. “Yahoo is just not at the forefront of consumers’ minds anymore. People are making the transition from the desktop to smartphones and tablets, and they’re seeing a lot less of Yahoo.”

Meanwhile, for the last few months, the tech world has watched as rumors have circulated about a possible Yahoo merger with AOL. Those talks have apparently come to naught.

“The real sticking point is that somebody needs to come up with cash money to buy Yahoo’s Asian assets,” Kim said. Yahoo’s stake in Alibaba and Yahoo Japan, along with the company’s other Asian assets, is worth an estimated $20 billion, give or take a few billion, or roughly its entire market cap.

A Yahoo spokesperson did not return a call for comment.

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Authors: Sam Gustin

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