Yahoo to lay off 2,000 (and you can expect more)
As expected, struggling Internet pioneer's new CEO moves to cut costs
The rumors last month turned out to be true.
On Wednesday, Yahoo announced the layoffs of 2,000 full-time workers -- or about 14% of the company's workforce of 14,100 -- as new chief executive Scott Thompson attempts to cut costs while trying to figure out a viable strategy for the embattled Internet pioneer.
Here's Yahoo's statement (oddly titled "Yahoo! Statement") about the job cuts:
Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.
"Today's actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal," said Scott Thompson, CEO of Yahoo!. "Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo!."
These "deeply valued" workers join several thousand other presumably equally "deeply valued" Yahoo employees who have lost their jobs over the past four years under a trio of CEOs. The latest action is the largest layoff by far, topping even the 1,600 workers axed in 2008 as the economy melted down.
Given that track record -- and given a typical CEO's penchant for hacking costs when all else fails -- is there any doubt that there will be more jobs lost at Yahoo, probably before the end of the year?
Of course not. Yet Yahoo sees only sunshine, ponies and rainbows in its future:
Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win.
Other than the layoff contest, where it's clearly a company to beat, what areas would those be again?
Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value.
Call me cynical, but that last bit is the real priority, not users, advertisers or "customer needs."
Yahoo's statement finishes with more blather, along with a ballpark estimate that it will save $375 million a year through the "employee transitions." Employee transitions. Honestly, I despite corporate BS.
Yahoo's revenue and share price have been stagnant for several years as it has been eclipsed by Google and Facebook as a favorite destination for online advertisers. This has led to shareholder uprisings and turmoil on the board, from which four directors announced their resignation earlier this year.
Shares of Yahoo (NASDAQ: YHOO) were up 9 cents, or 0.6%, to 15.27 in early trading Wednesday. So far, at least, Wall Street isn't enthused. But honestly, how could it be?