Yahoo to cut 1,700 workers as boss tries to save her own job

Yahoo is laying off about 1,700 employees in a shake-up likely to determine whether chief executive Marissa Mayer can save her own job.

Yahoo to cut 1,700 workers as boss tries to save her own job

Yahoo is laying off about 1,700 employees in a shake-up likely to determine whether chief executive Marissa Mayer can save her own job.

The long-anticipated purge will jettison about 15% of Yahoo’s workforce along with an assortment of services Ms Mayer decided are not worth the time and money that the Internet company has been putting into them.

The cost-cutting is designed to save about 400 million dollars annually to help offset a steep decline in net revenue this year.

Ms Mayer also hopes to sell some of Yahoo’s patents, real estate and other holdings for up to 3 billion dollars.

Products to be dumped include Yahoo Games, Yahoo TV and some of the digital magazines that Ms Mayer started as chief executive.

She will also close offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan.

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.

Analysts have speculated that Verizon, AT&T and Comcast might be interested in buying Yahoo’s main business, despite years of deterioration.

Ms Mayer expressed confidence that her plan to run Yahoo as a smaller, more focused company “will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners”.

But some of Yahoo’s most outspoken shareholders, such as SpringOwl Asset Management, have already concluded that Ms Mayer should be laid off, too.

Ms Mayer, a former rising star at Google who helped that company eclipse Yahoo, defended her performance.

“Yahoo is a far stronger, more modern company that it was three-and-half years ago,” she said.

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.

“We would like to see a higher stock price, and we think Marissa and her current management team have become a hindrance to that,” said Eric Jackson, SpringOwl’s managing director.

Yahoo’s revenue has been shrinking through most of Ms Mayer’s reign, even though she has spent more than 3 billion dollars buying more than 40 companies, while bringing in new talent and developing mobile applications and other services designed to attract more traffic and advertisers.

The decline has persisted while advertisers have been steadily increasing their digital marketing efforts. Most of that money has been flowing to Google and Facebook – two companies once far smaller than the now 20-year-old Yahoo.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited