Photograph by Jacqueline Ramseyer
Though construction has yet to be completed, dot.com stalwart Yahoo! is currently operating out its new corporate headquarters based in Sunnyvale. Meanwhile, the company has recently laid off one eighth of its workforce. The company maintains that the construction costs aren't linked to the layoffs.
Yahoo! lays off one eighth of employees
Move occurs as the company opens its new Sunnyvale base
By Gretchen Knaup
Residents of the Silicon Valley know the economy is slowing down. Many have already been affected by the slowdown or know someone who has. Many high- tech headquarters are based in Sunnyvale, and as a result, the city has assumed the identity of part of the core of Silicon Valley. But recently, the technology companies that have made it so unaffordable to live in the city are now the ones being driven out.
Hence, it was a shock when Internet stalwart Yahoo! Inc. recently laid off one-eighth of its employees. Although Yahoo! has offices in Europe, Asia, Latin America, Canada and throughout the U.S., 400 of the employees laid off were based in company headquarters, now located in Sunnyvale.
Last year Yahoo! decided to move its headquarters from Santa Clara to Sunnyvale. The construction began a little over a year ago and is already near completion. Though the company is currently operating out of the building, the move won't be completed until the end of the summer.
According to Yahoo's Public Relations Department, the loss in revenue hasn't changed plans for the new facility.
In regards to whether the slowing down or lowering the cost of construction could have enabled the retention of more employees, Diana Lee, director of public relations at Yahoo!, said, "Centralizing all of Yahoo!'s Silicon Valley locations to a facility in Sunnyvale will not only retain the speed, efficiency and effectiveness at which the organization operates, but we will also be reaping economic benefits as well, including lower costs, capital appreciation and less cost per square foot."
"By consolidating the employees and facilities, the new complex will allow the employees to interact in one location and provide a more cost-effective means of operating overall," Lee added.
On March 7, the Market Guide reported that Yahoo! Inc. had announced that its first quarter revenues and earnings were going to fall well short of Wall Street expectations due to decreased spending by advertisers on the site amid economic uncertainty. The company said it expected its first quarter revenues to be in the range of $170 million to $180 million. These statistics didn't bode well for Yahoo! employees.
In January of 2001, Yahoo! Inc. lowered its 2001 market guidance, Market Guide said. According to Yahoo, for the 2001 fiscal year revenues were expected to be between $1.2 billion to $1.3 billion with marketing services and commerce accounting for 80 percent to 85 percent of revenue, and business services growing to 15 percent to 20 percent.
These numbers were slightly lower than Wall Street's forecast of more than $1.4 billion in revenue. Yahoo! also expected revenues between $220 million and $240 million, which supposedly reflected an expectation of slower advertising expenditures, but was reliant on a continuation of the then current economic conditions. This estimate is a far cry from the expectation made only a few months later of approximately $180 million in March. It was expected that the company's success was not going to be as great as last year's, but there was still the expectation of significant revenue.
Sunnyvale, California Since 1994
