Fund argues for Yahoo job cuts, ouster of Mayer

SpringOwl Asset Management LLC, another investor, proposed a plan to reduce the number of Yahoo’s employees.

Eric Jackson says he has put forward a 99-page presentation to the company outlining a plan to slash the company’s workforce by 75% and oust the chief executive. Shareholders have sent out proposals to Yahoo’s California headquarters to pressure the board into setting a more precise direction for the company.

This departure comes after Yahoo! announced on Wednesday that it will not spinoff its assets in Alibaba Group (BABA) and instead spin off its core business along with others.

Getting rid of 9,000 employees along with “free food and other expensive sponsorships” such as parties could save the company at least $2 billion annually, the presentation said.

The protest by SpringOwl is the latest in a chorus of shareholders exasperated by Mayer’s failure to re-energize Yahoo to the stature it held in the early days of the consumer internet.

SpringOwl, a roughly US$300 million fund managed by activist investor Jason Ader, is pushing Yahoo to cut costs and bring in a strategic partner such as Liberty Media to help deal with tax issues. Some argue for Yahoo to sell its core businesses as quickly as possible.

SpringOwl lobbied for Yahoo to draw on cash reserves, sell real estate, and even borrow money to buy back shares and push up the stock price.

San Francisco: Yahoo CEO Marissa Mayer has followed a major business announcement with some big personal news. Mayer also noted the move would give more “transparency” to the operations of Yahoo’s core businesses, and analysts believed that implied Yahoo would be selling itself off bit by bit. “Requiring shareholders to continue to wait for definitive action for another year or more – and extending the tenure of senior management” is “simply unacceptable”.

Starboard hasn’t commented publicly on the plan Yahoo unveiled last week, and has not responded to our request for comment. However, last week, Chairman Maynard Webb said the board has not approved a sale process but it has “a fiduciary duty to entertain any offers”.