Yahoo! Laying Off 2,000 Employees
“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” stated Yahoo CEO Scott Thompson. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”
It’s a sad day for Yahoo! today as they are preparing to lay off 2,000 employees, which is 14% of their workforce. As a result of the lay-offs, Thompson will be restructuring management at the company. In the next few months, there will be more job cuts. Yahoo! will save about $375 million with the job cuts, which would incur a $125-$145 million pretax cash charge for employee severance in the second quarter. After cutting 2,000 people, Yahoo! will now have 12,000 employees. The marketing, research, and international divisions at Yahoo! were hit the hardest.
Another couple of issues that Yahoo! is dealing with is a proxy fight for board seats by Third Point and a patent countersuit from Facebook. Thompson has been working with Boston Consulting Group to strategize Yahoo!’s future moves. Below is a statement from Yahoo!
This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry
SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.
“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”
Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.
Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.
Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.