Yahoo to cut jobs, shed assets in major turnaround plan

Even after the mass firings are completed by the end of March, Yahoo will still have about 9,000 workers – three times the roughly 3,000 people that SpringOwl believes the company should be employing, based on its steadily declining revenue.

The company reported a loss of $4.43bn, or $4.70 per share, in the quarter, due to a large write-down to account for the lower value of some units.

Offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan would also be closed.

Yahoo reported a 15.2 per cent drop in adjusted revenue for the fourth quarter ended December 31, 2015, to $1.00 billion from $1.18 billion. The announcement comes as the company plans to cut 15% of its workforce while still pursuing its spinoff plans. Yahoo says that the planned layoffs will save the company about $400 million annually.

Yahoo which has been seeing its revenues fall since 2008 as it couldn’t compete with the likes of Google and Facebook had hired Mayer, then one of Google’s best-known executives, to turn the company around in 2012.

The struggling Web giant plans to focus its efforts on Mail, Search and Tumblr, while shutting down digital magazines and services like Yahoo! The company has been under increasing pressure from impatient shareholders.

Yahoo Inc is expected to announce on Tuesday that it is exploring “strategic alternatives” for its struggling Internet business, a person familiar with the matter said. In addition, Mayer said that Yahoo plans to emphasize on growing the company’s verticals in news, finance, sports and lifestyle.

Yahoo’s revenue – after deducting fees paid to partner websites – fell to $1.00 billion from $1.18 billion. The company also plans to sell some assets, including patents and real estates, to generate more than $1 billion (Rs 6,800 crore).

“Yahoo can not win the hearts and minds of users and advertisers with a complicated portfolio of products and assets, especially if some no longer meet our aggressive growth goals or distract from growth products”, she said in the call. We are extremely proud of the billion dollar-plus business we have built in mobile, video, native, and social.

However Mayer, who has recently returned from maternity leave, said she remains focused on a turnaround, a plan for which she unveiled on Tuesday. Things continue to look bleak, as Yahoo forecast a net revenue decline of 12 to 17 percent this year.