Yahoo’s new ‘aggressive strategic plan’ slays 1700 jobs, 5 offices

The company said it would cut about 15 per cent of its workforce and close offices in Madrid, Milan, Dubai, Mexico City and Buenos Aires. Yahoo reported flat revenues of $1.3 billion for the year, but net income fell somewhat precipitously from a $166 million profit last year to a $4.4 billion loss this year. CEO Marissa Mayer said she believes the new plan will “enable us to accelerate Yahoo’s transformation”, but many remain doubtful in light of the company’s longstanding struggles.

Yahoo CEO Marissa Mayer said that the company is now concentrating on a reverse “spin-off” of the Internet giant’s stakes in Alibaba and Yahoo Japan, which amounts to several billion dollars, in order to give back its investors that value.

During her tenure, the embattled Mayer has focused on growth in mobile, video, native advertising and social.

It will also focus on its “digital content strongholds”, which include Finance, News, Sports and Lifestyle.

She said the plan would explore ways to reduce costs by $400m and raise up to $3bn from sale of non-strategic assets, patents and real estate.

“The Board also believes that exploring additional strategic alternatives, in parallel to the execution of the management plan, is in the best interest of our shareholders”, said Yahoo’s chairman Maynard Webb. That will number to about 1,600 jobs.

Yahoo expects its workforce to be down to around 9,000 and have less than 1,000 contractors by the end of this year.

Charles Schwab and Max Levchin both recently resigned from the board, and it would seem that Mayer is putting on a good face before she throws dresses this pig up for auction. He declined to disclose the size of SpringOwl’s Yahoo investment.

As a result, the value of Yahoo’s shares has fallen 33% over the past year – declining 17% in the past three months alone – and the latest financial results are expected to take the share price even lower.

Last year, Yahoo revised the plan for tax reasons, deciding to spin off the core operations.

“A simpler product portfolio more focused on Yahoo’s strengths will allow the company to more quickly improve offerings to increase profitability”, she added. The end goal is to return to modest and accelerating growth in 2017 and 2018. Revenue rose slightly to USD 1.273 billion from USD 1.253 billion, while adjusted EBITDA dropped to USD 215 million from USD 409 million.

Once a leading internet company that brought the dot.com boom, Yahoo’s revenue has declined from $7bn in 2008 to less than $5bn as it lost market share to Google and Microsoft.