Yahoo to axe 15% of its workforce in turnaround plan as quarterly revenue slumps
Yahoo is to axe 15 per cent of its workforce as part of a flurry of changes to kickstart its stuttering business model as it revealed revenues in its latest quarter dipped 15 per cent to $1bn.
Up to 2,000 workers could be affected by the immediate change, which will shut offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan. The extent of the cuts is something of a gamble for chief executive Marissa Mayer, who took the reins in 2012 and has seen her attempts to recalibrate the company’s business model for the mobile and content trends stumble repeatedly.
The raft of redundancies form part of a broader rightsizing of the business that already plans to axe products such as Yahoo Games and Yahoo Smart TV. It’s an aggressive play to shed its non-core assets and could raise up to $3bn, while simultaneously freeing it up to hone in on the lucrative search and mobile market.
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Another change to the Yahoo business will be the spin off its lucrative 15 per cent stake in the Chinese online marketplace Alibaba. The move was planned for last year but was called off after opposition from activist shareholders and warnings that its tax bills would consequently spike. Yahoo is also still unsure as to whether it will shed its internet business after it earlier reversed on the decision.
Yahoo’s revenue has dipped slightly since Mayer took over three years ago and its been unable to keep pace in the search market with leader Google.
The under fire Mayer said the “strategic plan” to be detailed in a conference call tonight (2 February) will “accelerate Yahoo’s transformation.
"This is a strong plan calling for bold shifts in products and in resources. We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social (Mavens)," she continued.
"Our strategic bets in Mavens have enabled us to build an entirely new, forward-leaning business of tremendous scale and growth in just three years. The plan announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners."