NEW YORK (AdAge.com) -- Yahoo is preparing to make significant cuts to its product staff in the coming weeks and managers were asked to come up with 20% headcount reductions as a planning exercise, according to a source familiar with the matter.
The cuts won't be that deep -- likely in the 10% range, according to AllThingsD's Kara Swisher -- but they're coming, and they mark another setback for the company as it struggles to improve revenue and margins.
These will be the first major layoffs at Yahoo since April 2009, shortly after CEO Carol Bartz took the helm of the company from co-founder Jerry Yang. The cuts are reportedly coming from the product group led by Chief Product Officer Blake Irving, who joined the company from Microsoft in April.
Yahoo initially denied a report in TechCrunch that it was looking to lay off 20% of its staff.
"Yahoo is always evaluating expenses to align with the company's financial goals. However, a 20% reduction in Yahoo's workforce across the board is misleading and inaccurate," the company said in a statement.
The ailing Sunnyvale-based portal has come under heavy criticism in the wake of some turbulence in its management team, as well as having posted flat revenues for the most recent quarter. But it recently hired two top executives -- Ross Levinsohn, a former News Corp. executive to head up its Americas businesses, and Wayne Powers, formerly of Time Inc., who will head up North America sales. Exec VP Hilary Schneider, Senior VP David Ko and Media VP Jimmy Pitaro all announced last month they would be leaving the company, though separately from each other.