A new year often brings about change, but for technology giant Yahoo, change is coming in the form of a reported plan to cut 10 percent of its
reported that the company’s media business, overseas operations in Europe and its platforms-tech group could see the most damage. Though Yahoo executives declined to comment when the news broke Thursday, it’s believed that layoffs could be coming as early
as the end of January.
It’s reported that certain employees had been preparing to see layoffs as early as November 2015, when Yahoo decided to hire McKinsey & Co. for assistance with
its “reorganization” effort.
The gist of the plan to reorganize, Business Insider reported, is this:
Yahoo told Business Insider earlier on Wednesday that the company plans to announce “additional plans for a more focused Yahoo on or before our Q4 earnings
call," which should be in the next few weeks.
In the absence of a press release or statement from Yahoo’s CEO, Marissa Mayer, it’s unclear how many jobs will be cleared from the company’s slate. A 10
percent cut would equate to more than 1,000 people out of work.
Activist investment group and Yahoo shareholder Starboard Value released a letter to Yahoo’s board expressing
distrust in the organization’s lack of leadership, and it said it had lost confidence in the ability of Yahoo’s top leaders to manage the company.
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Friday morning, Yahoo Finance posted the letter online.
Here’s an excerpt:
If nothing else, the results of the past three years, which follow several other failed attempts to turnaround the business theretofore, should demonstrate
to you that turning around this business is extremely difficult. To be successful, dramatically different thinking is required, together with significant
changes across all aspects of the business starting at the board level, and including executive leadership. New leadership will have to develop and
implement a plan to balance priorities between growth and profitability. This will mean prioritizing and investing in certain parts of the business while
at the same time deeply reducing unnecessary costs, selling or exiting many unprofitable businesses and research projects, and overhauling the incentives
and compensation programs to instill sound business behavior.
It isn’t clear yet whether Starboard’s stance mirrors the feelings of other investors when it comes to Mayer’s leadership abilities, as Starboard holds
only 0.75 percent of the company’s shares.
The next few weeks will likely require extra attention from Yahoo’s crisis communications team to keep Mayer’s image afloat. It’s reported that in a seemingly
panicked move to unify senior level staff, she required all remaining senior executives to sign written statements in August stating they agreed to remain
with the organization for three more years.