Yahoo to cut its workforce by 15%

In a comment to Techly, Yahoo7 noted that “the recent Yahoo announcements will not affect our 2016 strategic plan or local team”.

The layoffs will result in savings of $400 million (£292m) annually, said Yahoo, as the company also prepares to close five offices around the world, including Dubai, Madrid, and Milan.

Interestingly enough, IB Times reported that Yahoo earned revenues worth $1.27 billion for 2015 Q4, beating the expectations of analysts who had predicted revenues worth $1.19 billion during the quarter.

The cuts will form part of an “aggressive strategic plan” in a bid to “improve profitability and accelerate growth by sharpening focus”.

Under the gun to jump-start growth it its core advertising business, Yahoo last week promised to detail plans for a “more focused” company on or before its Tuesday earnings call. It will also continue to invest in its so-called “Mavens” strategy, which stands for its key focus areas of mobile, video, native, and social. 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 has been on shaky ground for quite some time, with investors pressing Yahoo to sell off its core internet business.

“We believe the strategic plan does not fully address the core issues which have destroyed shareholder value – poor capital allocation, bad strategic partnerships, out of control spending and a bloated workforce”, said New York-based SpringOwl Asset Management, a shareholder which has called for changes at the company.

Yahoo Games and Smart TV products will go, while some of the Digital Magazine initiatives are set to be consolidated.

In an apparent concession to frustrated shareholders, Ms Mayer also said Yahoo’s board will consider “strategic alternatives” that could result in the sale of all the company’s Internet operations. “This is a strong plan calling for bold shifts in products and in resources”.

Yahoo’s stock fell 2% overnight and frustrated investors, including hedge fund Starboard Value, claim Ms Mayer and her staff have failed to make any impact on the company’s failing fortunes in more than three years. After subtracting ad commissions, revenue plunged 15 percent to $1 billion compared with the previous year – the biggest drop since Mayer became CEO in July 2012.

“It’s expected that most of these changes will take place in Q1, but by the end of 2016, the Company anticipates having approximately 9,000 employees and fewer than 1,000 contractors”, Yahoo said in a news release.

“With these seven products Yahoo will better guide discovery for users going forward”, Mayer said.