4-Yahoo to cut 5 pct jobs; 1st quarter profit in line

Yahoo said last October it would cut about one-tenth of its workforce, or about 1,600 jobs. The company finished 2008 with roughly 13,600 employees and said it would take severance charges from the new round of layoffs during the second quarter.

Yahoo said its operating cash flow, excluding certain items, was $409 million in the first quarter, at the high end of the $365 million to $415 million range it forecast in January.

Yahoo shares were up 54 cents at $14.92 in after-hours trading on Tuesday. The company’s stock is up roughly 9 percent from its Monday close of $13.66.

Yahoo’s financial report comes as speculation has mounted that the firm has restarted discussions with software giant Microsoft Corp (MSFT.O) about an Internet search partnership, following last year’s failed merger negotiations.

Bartz, who replaced Yahoo co-founder Jerry Yang in the top job in January, declined to comment on anything related to Microsoft during the conference call on Tuesday.

But she reiterated her belief that search is a very valuable part of Yahoo’s business.

“I’m well-versed enough in the search business at Yahoo to say it’s absolutely critical to Yahoo,” Bartz said in response to a question regarding whether she is now familiar enough with the business to respond to an offer for search.

AIM TO KEEP COSTS IN LINE

In the first full quarter under Bartz’s leadership, Yahoo generated revenue of $1.58 billion, down 13 percent from the year-ago period

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