Job cuts come to HotJobs

Yahoo confirmed that it laid off an undisclosed number of employees from its HotJobs subsidiary, raising questions about whether the struggling labor market may be taking its toll on the online job listings business.

Details of the job cuts arose after a Wall Street analyst issued an investor note claiming HotJobs laid off more than 20 employees. A HotJobs spokeswoman confirmed the layoffs, which occurred in February, but said the number of reductions was less than the analyst's estimate, though she wouldn't elaborate.

"We restructured some redundancies and centralized account management," said the spokeswoman.

Yahoo completed its acquisition of HotJobs in February 2002 for $436 million in cash and stock, outbidding TMP Worldwide's Monster.com. Yahoo wanted HotJobs as a way to bolster its nonadvertising revenue during the online advertising downturn, and the division now is considered a significant contributor to its fees and listing revenue.

Still, the HotJobs' financial performance remains a secret, lumped in with the company's other fee-based businesses, such as its enterprise solutions division, and premium services such as Internet access, online personals and enhanced e-mail. Last summer, Wall Street analysts speculated that the market for online job listings was declining, given the staggering economy, the worsening labor market and financial warnings from Monster.com.

"One would have to surmise that given lack of job creation, HotJobs (is) feeling some growing pains," said Jordan Rohan, analyst at SoundView Technology Group, who authored the report. Rohan also reduced his estimates for the company due to concerns of decreased revenue from paid search.

For now, Yahoo executives have lumped HotJobs into a greater category of new businesses that have helped boost the company's revenue over the past 18 months. In February, Yahoo CEO Terry Semel said HotJobs, along with its lucrative paid search deal with Overture and the launch of its premium services, have contributed to half of Yahoo's revenue.