Business & Economy

Yahoo's Burbank layoffs, closure consolidates its operations at Silicon Beach

The Yahoo! Center in Santa Monica.  The company moved its Santa Monica offices to Playa Vista last August.
The Yahoo! Center in Santa Monica. The company moved its Santa Monica offices to Playa Vista last August.
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About 150 Yahoo Inc. employees in Southern California learned earlier this week that their jobs will be part of a 15 percent cut in the company's workforce.  

Yahoo is laying off 90 workers at its Burbank offices and 60 employees at its new facility in Playa Vista. The company is also closing its office in Burbank and moving the remaining workers to Playa Vista.

The layoffs and office closure are part of the long-anticipated downsizing that Yahoo CEO Marissa Mayer announced earlier this month. The changes come as the Internet giant continues to struggle to find its identity and a sustainable business model.

Locally, the Yahoo cuts are part of a trend of companies moving to the shores of what's now called Silicon Beach, the area in west Los Angeles that's the city's answer to Silicon Valley.

Yahoo moved from office space in Pasadena to a new campus in Burbank in 2006. Technology consultant Darren Clark, who worked for Yahoo then, said more than 1,000 Yahoo employees filled  two of the three buildings on the Burbank campus.  

"They had it geared up to really be their anchor location down here in L.A,"  said Clark.

He remembers a once-thriving tech corridor stretching from Pasadena through Glendale into Burbank, with companies like IdeaLab, eHarmony, and Overture, which Yahoo acquired in 2003. 

"It used to be a lot healthier. Now it seems like the corporate gravity is shifting to Venice and Santa Monica," Clark told KPCC.  "That's pulling a lot of the talent over there for the start-up and tech scene. "

He said the die was cast at Yahoo's Burbank campus in 2009, when the company made a deal to outsource its paid search business to Microsoft. Yahoo had made Burbank its headquarters for search marketing. 

"That’s really when Burbank started getting whittled away," remembers Clark, who had left before the downsizing and layoffs.  

Yahoo would not disclose specific workforce numbers for its facilities, but a post on the company's recruitment site said more than 400 employees worked in Burbank in early 2013. Clark said he was told the number fell below 200 by early last year.

As Burbank's size dwindled, Yahoo's staff in Santa Monica grew. Then last August, Yahoo moved its Santa Monica staff into new and larger digs in Playa Vista, where a growing tech community had already welcomed Microsoft, YouTube, and IMAX.  

Google also purchased 12 acres in Playa Vista in 2014 and is expected to expand there from its L.A. location in Venice.

"This is less about Yahoo and more about the L.A. tech scene, but it’s like we’re really putting all of our eggs in the Silicon Beach basket," Clark said. "It's good in some respects, but if I'm a technologist in L.A. and I live in the San Fernando or San Gabriel Valley, it's like, 'Wow, I guess I gotta figure out how to get to the west side." 

A spokeswoman said the company expects to offer a shuttle for those Yahoo Burbank employees who now must commute to Playa Vista.