Yahoo! Layoffs Target 65 Workers at Search Marketing

When Yahoo! Search Marketing moved to Burbank from Pasadena in 2006, the city welcomed a prominent corporate employer and 1,200 local jobs. Post-recession, however, the glow has faded as Yahoo! revenues weakened and the division gradually shed employees . As of Jan. 1, a business permit tax document filed with the City of Burbank listed Yahoo! as having 555 employees, nearly half as many workers as the company initially employed. A company spokesperson would not say how many are currently working there. Yahoo! announced a round of 2,000 layoffs earlier this month, which by June will result in another 65 positions being eliminated at the Search Marketing division’s headquarters, located 3333 Empire Ave. Those employees are among 1,020 being laid off statewide as Yahoo! goes through a restructuring. Burbank’s Deputy City Manager Joy Forbes said the news is a blow to the city. Still, it could have been worse. “None of this is ever good news, but at least the group we have in Burbank is probably pretty efficient if we are talking 2,000 layoffs and this (65) is our portion,” Forbes said. In 2009, 210 positions were cut in Burbank, according to Worker Adjustment and Retraining Notifications filed with the state. The Verdugo Workforce Investment Board has been notified of the most recent layoffs and will schedule a visit to the Burbank offices with representatives of the state Employment Development Department, said Don Nakamoto, director of the workforce investment board. The laid-off employees will be given information on accessing unemployment benefits and services from the workforce investment board such as tips on conducting a job search, and training to upgrade skills or transition to another career. “If they were on the technical side they may have an easier time,” finding a job, Nakamoto said. “The demand is strong for IT-related occupations.” Search marketing uses an auction model for businesses to bid for prime space in search results. Yahoo! Search Marketing began in Pasadena as a start-up called GoTo.com and later changed its name to Overture Services. Yahoo! acquired the company in 2003 and gave it the new moniker of Yahoo! Search Marketing. The company’s move to Burbank followed a full-court press by city officials who promoted the location, transportation, amenities, lack of a gross receipt tax and old-fashioned small town charm. Los Angeles and Monrovia were also in competition to be home for the firm. Burbank was selected as the best match for the company’s brand, because it provided the necessary space to create an environment similar to that found in the company headquarters in upstate Sunnyvale. When Yahoo! moved into the Media Studios North, its buildings included two cafeterias and a gym. The courtyard area provided outdoor seating, landscaped pathways and life-size chess board. But as the search marketing division shed employees it reduced its footprint in the buildings it leased. The space vacated by Yahoo! is now used by other companies. When the move to Burbank took place, Yahoo! was a high flying company nearly untouchable in the digital media space. Its revenues in 2007 topped nearly $7 billion. The recession and strong competition from Google and Facebook revealed cracks in the Yahoo! armor. A round of layoffs in 2008 cost more than 1,500 jobs. By the end of the 2011 fiscal year revenues had dropped to $5 billion. The latest layoffs will create a “smaller, nimbler more profitable” company, CEO Scott Thompson said. In an April 10 memo to employees, Thompson outlined a restructuring of Yahoo! into three divisions — Consumer, Regions and Technology. Staff reporter Andrew Khouri contributed to this story.