Yahoo to slash jobs and close Web properties in major turnaround plan

Spinning off its core Internet services remains an option

Yahoo will cut 15 per cent of its workforce and close some online services in a major turnaround plan announced on Tuesday.

The company plans to double down on search, Mail and Tumblr in hopes of attracting new users, and at the same time close some digital magazines as well as services like Games and Smart TV.

After the job cuts, Yahoo will have a global workforce of about 9,000 employees -- 40 percent smaller than it was in 2012, it said.

"This is a strong plan calling for bold shifts in products and in resources," CEO Marissa Mayer said in a statement.

The goal is to cut $US400 million from Yahoo's expenses by the end of 2016. Yahoo will also explore selling off "non-strategic assets" that it said could raise it $US1 billion in cash.

It's the latest effort by Mayer to placate shareholders while she tries to turn Yahoo's business around and get it back to growth, something she's been working on since taking the helm more than three years ago. But investors are getting impatient.

While it puts the new plan in action, Yahoo will continue to explore spinning off its core Internet businesses as a separate company, something it said it was considering in December.

The idea is to separate those businesses from Yahoo's stake in Chinese Internet giant, Alibaba, which is seen as most valuable to investors.

Yahoo announced the news along with its earnings for the fourth quarter. Revenue was virtually unchanged year over year at $US1.3 billion, but profit fell precipitously, from $US166 million last year to a loss of $US4.4 billion in the most recent fourth quarter.

Most of that loss was due to a massive goodwill impairment charge, which basically means that Yahoo concluded its brands are worth much less than before.

On an adjusted basis, earnings were in line with what analysts had been expecting, and revenue was slightly better.

"In 2016, a smaller product portfolio emphasising Yahoo's core strengths will yield better focus, execution, and ultimately clearer value to shareholders, advertisers and users," Yahoo said.

It said the changes will return it to "modest and accelerating growth in 2017 and 2018."

The goal is to play to the company's strengths, get users to spend more time on products that have traditionally done well, like Mail, and save money by cutting those that have underperformed.

Mayer left Google to take over Yahoo nearly four years ago. She's spent heavily on numerous acquisitions, including that of Tumblr, and on hiring star power like the news presenter, Katie Couric, but it's failed to bring Yahoo much growth.

Revenue during the quarter before Mayer took over was $US1.1 billion, not much below what it was last quarter.

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Are you leading technology changes or is technology leading you?

In a recent conversation with a chief technology officer, he asserted all digital technology changes in his organisation were being led by IT and not by marketing. It made me wonder: How long a marketing function like this could survive?

Jean-Luc Ambrosi

Author, marketer

Disruption Down Under – What’s Amazon’s real competitive advantage?

Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.

Change across the board: Why boards need to digitally evolve

Traditionally the non-executive board of a company acts in an advisory capacity - attending monthly board meetings to offer overarching advice and guidance typically focusing on:

Jodie Sangster

CEO, ADMA

Great Post.Thanks for sharing such an informative article.I have worked with Ally Digital Media and it has a very good service which is b...

Utkarsh Kansara

Predictions: 17 digital marketing trends for 2017

Read more

Really inspiring !

Goldenboy Media

Jaywing sets sights on Australian growth with digital and data-driven agency model

Read more

Being aware of regulations or guidlines is just the start. As our CEO Emma Lo Russo stated exactly two weeks ago at an event we supported...

Alan Smith

​Are the Wild West days of influencer collaboration over?

Read more

Rebranding is always nice solution to get better organisation. Businessman may apply certain special services (for example, https://www.l...

David Hill

CMO interview: Spearheading the global rebranding of OFX

Read more

Thank you so much for sharing this article.Top Digital Marketing company in Bangalore

Way To DM

Predictions: 17 digital marketing trends for 2017

Read more

Latest Podcast

More podcasts

Sign in