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SUNNYVALE, CA-News that Yahoo Inc. will lay off 10% of its work force, or about 1,500 employees, has raised questions about whether the cuts will place more office space on the market. But even before the Sunnyvale-based company announced the job cuts in its earnings report this week, it had already placed a substantial amount of space on the market for sublease in at least one locale—the Seattle area. The company has been looking to sublease approximately 50% of the 115,000 sf it took down last year at One [email protected] in Bellevue, WA, when it was still in a growth mode in terms of leasing space.

Yahoo occupies owned and leased space aggregating approximately 1.8 million sf at its headquarters in Sunnyvale, according to SEC documents filed by the company, and it has been leasing a growing amount of space over the past few years. Its gross lease commitments have grown from $55 million in 2005 to $131 million in 2008, according to SEC filings. The company currently leases office space in more than 50 markets worldwide.

Whether the job cuts will mean more Yahoo sublease space on the market, of course, depends on how dispersed the layoffs are. If the cuts are widely dispersed and involve only a few workers each in a large number of buildings, they would not necessarily mean that Yahoo would vacate space as a result of the layoffs. On the other hand, they could mean more Yahoo sublease space will hit the market if the cuts are concentrated in a specific geographic area or building. Yahoo execs did not elaborate on those questions in their conference call regarding the company’s quarterly results.

Yahoo execs said the job cuts are part of a companywide effort to reduce costs. The company blamed economic conditions and softening ad sales as factors in the cost-cutting. Yahoo’s goal is to reduce its costs by more than $400 million before the end of 2008 by trimming what it terms “both headcount and non-headcount-related” expenses. “Because the majority of expenses are headcount-related, Yahoo! expects to reduce its global work force by at least 10% during the fourth quarter of 2008,” the company said in its third-quarter earnings report.

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