Yahoo to cut 15% of its workforce

The company sees the cuts resulting in savings of $400 million a year.

Yahoo plans to cut about 15% of its workforce as part of a strategy to turnaround the troubled Net company. The company recorded a loss of $4.43 billion, or $4.70 per share, as it took a hefty write-down of almost $4.5 billion to account for the lower value of some units, including the online blogging site Tumblr.

Yahoo said that by the end of 2016, it anticipates having about 9,000 employees and fewer than 1,000 contractors, which represents a workforce that is roughly 42 percent smaller than it was in 2012.

Yahoo CEO Marissa Mayer on Tuesday announced a series of sweeping measures as she seeks to turn the company around, including job cuts affecting in excess of 1,600 staff and up to $3 billion worth of asset sales. “We’ll also exit legacy products including Yahoo Games and Smart TV, while we’ll continue to support a handful of higher-margin, higher-engagement legacy products like Flickr”.

When compared to other mobile advertising businesses like Facebook, it appears that Yahoo is having trouble in translating that base into revenue. The aim is to increase mobile, video, native and social advertising revenue while also cutting operating costs.

Yahoo has given strong indications that it is willing to sell its core business, saying it would consider “strategic alternatives” for its websites, email and online search functions in the wake of continuing losses in its 2015 Q4 results. There is also an “Asset Sale” on the cards, which could leave even more Yahoo properties in the hands of new owners, but only if things don’t improve for the company.

“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation”. He added that Yahoo will continued to work on its reverse spinoff of the core business and “will engage on qualified strategic proposals”.

Yahoo has announced it will lay off 15 percent of its employees in a bid to return the company to its past success rates after it lost $4.4 billion in its last quarter.

Up to Tuesday’s close of $29.06, Yahoo’s shares had fallen 35 percent in the past 12 months.

Accepting the demands of the investors and analysts, Yahoo will now concentrate on its search, mail plus Tumblr products in markets like the United States, Canada, U.K., Hong Kong, Denmark and Taiwan.