Yahoo Announces Layoffs, Sales Plans

Revenue was virtually unchanged year over year at $1.3 billion, but profit fell precipitously, from $166 million last year to a loss of $4.4 billion in the most recent fourth quarter. “The company will shift most of the resources in this area toward more forward-leaning mobile search investments, positioning it to redefine search for mobile devices, which will help drive sustainable long-term growth and differentiation”.

Investors were not immediately impressed, sending Yahoo shares down 1.2 percent after hours.

In a call with analysts and investors, Mayer said Yahoo will focus its efforts around its search, mail and Tumblr products in its U.S., Canada, U.K., Denmark, Hong Kong and Taiwan markets.

Instead of selling its core business, Yahoo said in December that it would focus on spinning of its core business and its stake in Yahoo Japan to create a separate publicly traded company.

It is also closing offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan.

Marissa Mayer, Chief Executive at Yahoo Inc. (NASDAQ:YHOO), not just because it is due to report fourth-quarter fiscal 2015 (Q4FY15) results, but also since this is likely the last chance for CEO Marissa Mayer to prove worth her salt.

In total, Yahoo plans to have around 9,000 employees and 1,000 contractors by the end of the first quarter, a 42 percent drop in its workforce since 2012. Those figures beat analysts’ expectations of $1.19 billion in revenue and matched estimates of 13 cents in adjusted earnings per share for the quarter.

Yahoo said it will reduce operating expenses by more than $400 million by the end of the year. Yahoo’s board also said it would consider “additional strategic alternatives”, hinting that a sale was not out of the question.

In an apparent concession to some shareholders, Mayer also said Yahoo’s board will mull “strategic alternatives” that could result in the sale of all the company’s Internet operations. The new strategy gives Mayer another tool to fight off a looming fight with activist shareholders, who want to wrest control of the company away from her. By making Yahoo leaner and more profitable, Mayer could gain some key supporters. As newer Internet search and content hubs such as Facebook Inc. and Google have lured advertisers, Yahoo has failed to keep pace, and sales have slipped since reaching a peak in 2008.

The Internet company reported $1.27 billion in revenue, up only 1.58% from the same period a year earlier.