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Layoff rumors swirl around Yahoo

By Stacy Cowley, tech editor


NEW YORK (CNNMoney.com) -- Yahoo is preparing to cull its workforce of around 14,000, according to reports from two tech blogs, but how deep the cuts will go is an open question.

TechCrunch reported Thursday that Yahoo is preparing to cut 20% of its total staff and has told managers to start making choices about how to trim their departments' headcount. Yahoo immediately deflected that report.

"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," a company representative said in a prepared statement.

But AllThingsD quickly followed TechCrunch with a report that Yahoo is planning cuts that will be "almost completely centered on the product organization" and will thin that department's staffing by 10%.

TechCrunch is sticking with its report, adding in an update that its sources say "managers are being asked to target 20%."

Some managers at Yahoo say they're unfazed by the rumors. In an interview late Thursday with CNN.com, Mark Walker, head of Yahoo News, said he's not worried about his division coming under scrutiny if the company goes hunting for staff reductions.

"I try to run a very efficient operation," he said. "If you're asking whether I have some undue concerns about such things, then the answer is no."

Yahoo (YHOO, Fortune 500) has already been through several rounds of large layoffs, including one last year that cut its workforce by 5% and shed around 700 employees. Yahoo CEO Carol Bartz, who tool the reins 20 months ago, has been under intense pressure lately to map out a strategic plan for her sprawling content empire. Yahoo's sales last quarter fell short of forecasts, and Wall Street is itching to find a partner -- like AOL or Alibaba -- to merge with the company and lead it out of the wilderness.

Bartz will have a chance to talk about her Yahoo vision at next week's Web 2.0 Summit in San Francisco, where she's a top-billed speaker. With the clock now ticking loudly in her ear, the conversation between her and conference moderator John Battelle could be fiery.

-CNN.com's Mark Milian in San Francisco contributed to this report To top of page

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