Yahoo is setting itself up to lay off about 1,700 employees and shedding some of its huge baggage and in this process what is likely to determine is whether CEO Marissa Mayer manages to save her own job.
The long-anticipated purge,was announced yesterday ie 2nd of Feb, saying its gona cut down about 15 percent of Yahoo’s workforce along with an assortment of services ,which aren’t worth the time and money that the Internet company has been putting into them.
Yahoo said the job cuts are part of a four-point “strategic plan for growth” that will streamline its product offerings and initatives and which Yahoo said should return the company “modest and accelerating growth” in 2017 and 2018.
Here is the four-point plan that Yahoo announced on Tuesday:
Play to Strengths to Grow User Engagement.
Drive Mavens Revenue Growth.
Simplify the Business to Improve Execution.
Efficiently Align Resources
The cost-cutting is designed to save about $400 million annually to help offset a steep decline in net revenue this year.
Mayer also hopes to sell some of company’s patents, real estate and other holdings for $1 billion to $3 billion.
Products to be dumped include Yahoo Games, Yahoo TV and some of the digital magazines that Mayer started as CEO. She will also close offices in Dubai, United Arab Emirates; Mexico City; Buenos Aires, Argentina; Madrid, Spain; and Milan, Italy.
In an apparent concession to frustrated shareholders, Mayer also said Yahoo’s board will mull “strategic alternatives” that could result in the sale of all the company’s Internet operations. Analysts have speculated that Verizon, AT&T and Comcast might be interested in buying Yahoo’s main business, despite years of deterioration.
Mayer expressed confidence that her plan to run Yahoo as a smaller, more focused company “will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners.”
Shareholders have questioned whether she has figured out how to revive the Internet company’s growth after three-and-half years of futility. company’s stock shed 78 cents, or 2 percent, to $28.28 extended trading after details of Mayer’s latest turnaround attempt came out. The stock has fallen by more than 40 percent since the end of 2014 as investors’ confidence in Mayer has faded.
Some of Yahoo’s most outspoken shareholders, such as SpringOwl Asset Management, already have concluded that Mayer should be laid off, too.
Mayer, a former rising star at Google who helped Google eclipse Yahoo, defended her performance.
“Yahoo is a far stronger, more modern company that it was three-and-half years ago,” she said in a video presentation on Tuesday.
Even after the mass firings are completed by the end of March, Yahoo will still have about 9,000 workers — three times the roughly 3,000 people that SpringOwl believes the company should be employing, based on its steadily declining revenue.
company’s revenue has been shrinking through most of Mayer’s reign, even though she has spent more than $3 billion buying more than 40 companies, while bringing in new talent and developing mobile applications and other services designed to attract more traffic and advertisers.
The decline had been persistent as advertisers have been steadily increasing their digital marketing efforts. Most of that money has been flowing to Google and Facebook — two companies once far smaller than the now 20-year-old Yahoo Inc.
company’s fourth-quarter report provided enough evidence of the company’s deterioration. After subtracting ad commissions, revenue plunged 15 percent to $1 billion compared with the previous year — the biggest drop since Mayer became CEO in July 2012. Things till look bleak, as company’s forecast a net revenue decline of 12 percent to 17 percent this year.