Bad news for Yahoo employees! 1700 workers to be axed, including CEO

Yahoo has announced plans to eliminate roughly 15 per cent of its workforce and explore the sale of non-strategic assets, in the company’s latest plan to revitalise the internet company. During its recent quarter, Yahoo pulled in $1.27 billion in revenue, but had a massive write-down of $4.5 billion.

So far Yahoo is set to shut down some of their own online magazines, their smart TV business, as well as online games sites.

In December, Yahoo announced it was planning a spinoff of its core business, not its holdings in Chinese e-retailer Alibaba as it had planned. In regular trading Tuesday, its stock price had fallen 1.7% to 29.06. Despite spending billions of dollars buying numerous companies, changing the company’s logo and hiring A-list media personalities, Yahoo’s core Internet advertising business has continued to lose ground to Google and Facebook.

Mayer will address investors and review the company’s fourth quarter earnings results in a presentation that begins at 2 p.m. Observers said the call is a key moment for Mayer, who must convince upset shareholders that her vision to turnaround the company over several years by investing in people and products is the right call.

But that isn’t happening overnight, and there are signs that Mayer’s plan has some holes in it. Yahoo expects mobile, video, native ads and social to grow by just 12% this year year, slower than last year’s growth. Operating earnings totaled 13 cents a share, which squared with Wall Street forecasts. The company hopes this will “fuel growth, drive and increase revenue”, unfortunately for workers at Yahoo, the plan will also see current jobs being cut by 15%.

Yahoo will make more investment in the Tumblr and digital content in News, Sports, Finance, and Lifestyle. “As a result of this four-point plan, Yahoo is expected to return to modest and accelerating growth in 2017 and 2018”.

Companies such as Verizon have been open about their interest in looking at Yahoo as a potential acquisition.

The California company reported a loss of US$4.43 billion (S$6.3 billion) in the final three months of past year, due mostly to lowering the value of its US, Canada, Europe, Latin America and Tumblr units.

Yahoo CEO Marissa Mayer is facing the fight of her life.

Yahoo will also focus on its Mavens businesses, or its mobile, video, native, and social businesses.

Through the end of 2016, the company estimates those efforts could generate between $1 billion and $3 billion in cash.

For the fourth quarter, the company reported sales, excluding revenue shared with partner websites, of $1 billion.

Last year, Yahoo revised the plan for tax reasons, deciding to spin off the core operations in a move that could open it up to a sale or other strategic deal.

Mobile search is the biggest opportunity, per the company, so it will shift most of its resources in that direction, positioning Yahoo to redefine platforms to support mobile devices.