After posting lackluster earnings for the first quarter, Yahoo is laying off 600 employees and shuttering its Columbus office. The surprise is that Flickr was hit especially hard by these cuts, losing a number of its few remaining engineers.

Yahoo’s revenue for the first quarter was down 13 percent year over year. The company’s earnings were off 78 percent, returning a paltry 8 cents per share to stockholders.

In the earnings call, CEO Carol Bartz announced that the company would lay off 5 percent of its workforce. The majority of the cuts happened yesterday as approximately 600 Yahoos found themselves out of a job.

Flickr has been a sacred cow at Yahoo since its acquisition in 2005. It is one of the few Yahoo-owned products that created a substantial buzz in recent memory.

Co-Founder Stewart Butterfield already fled the struggling company last year. More recently he was joined by Flickr Chief Architect Cal Henderson.

This move couldn’t have come at a better time for Henderson, who left shortly before the axe fell on his compatriots. Valley insider Om Malik tracked the exits of at least three other Flickr team members via their Twitter streams yesterday.

Malik questions the wisdom of this decision, calling the Flickr team, “one of the few pockets of future-thinking tinkerers at Yahoo.” Now, more than ever, Yahoo could use a breakthrough new product to reinvigorate its languishing engineers.

In addition to dismantling the Flickr team, Yahoo also laid off its remaining employees in Columbus as part of a plan to shutter its office there. While closing satellite offices is a fairly standard cost cutting method, Yahoo lost some quite talented people.

This round of layoffs marks the third in the last year. Bartz may be resting her hopes on a search deal with Microsoft, but she better get it done quickly if she expects any of her top talent to hang around.

Related:

Entry was posted on Thursday, April 30th, 2009 at 11:08 am under Yahoo!.

Read more entries by Dave Jeyes.
Stumble It!