Yahoo has announced its plans to cut 15% of its workforce as the company pursues an “aggressive strategic plan” to return to profitability.
The company says the job cuts will reduce the number of its employees to about 9,000 by the end of 2016.
Yahoo’s announcement came as the company reported a $4.3 billion loss for 2015.
In a statement, Yahoo CEO Marissa Mayer said: “This is a strong plan calling for bold shifts in products and in resources.”
Marissa Mayer added that it would “dramatically brighten our future and improve our competitiveness and attractiveness to users, advertisers, and partners”.
The head-count reduction is the latest part of Marissa Mayer’s attempt to turn around Yahoo, which is struggling to compete against the likes of Facebook and Google.
In December, Yahoo announced it was reversing a plan to sell its stake in the Chinese e-commerce site Alibaba, and would instead look to spin off its core internet business.
Marissa Mayer was forced to change course on the Alibaba sale following pressure from several activist investors.
The focus on cutting costs and raising profits is being seen as the latest sign that Yahoo is becoming more serious about selling its core internet business.
As well as shedding much of its workforce, Yahoo plans to sell off some of its product lines – such as Yahoo TV and Yahoo Games – so that it can focus on its search business, email and Tumblr blogging site.
Yahoo is also closing offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan.
That should lead to “modest and accelerating growth in 2017 and 2018,” the company said.
Yahoo has estimated the cutting back of its product line alone could generate $1 billion.
Marissa Mayer has been under pressure from investors to step down as chief executive.
Yahoo’s shares fell 1.4% in after hours of trading.
Yahoo CEO Marissa Mayer has announced she is expecting twin girls in December, but plans to take “limited” time off.
In a blogpost, Marissa Mayer, 40, said that because this was “a unique time in Yahoo’s transformation”, she planned to take a similar approach to when she had her first child and “work throughout”.
Marissa Mayer famously returned to work two weeks after giving birth to her son.
In its corporate blog, Yahoo said it was “extremely happy” for Marissa Mayer.
Marissa Mayer has been chief executive for three years at Yahoo. She is in the process of changing the company’s focus away from the traditional desktop and towards mobile and video adverts, in order to increase sales.
In the company’s last earnings report, Marissa Mayer said she was encouraged by an increase in revenue from that division, despite recording a net loss of $21.6 million in Q2 2015.
Yahoo is also in the midst of spinning off its stake in China’s Alibaba.
Marissa Mayer said she was surprised by the news that she was expecting twins, since there is no history of it in her family, but that she and her husband, start-up investor Zachary Bogue, had “embraced” it and they were “very excited”.
“Moving forward, there will be a lot to do for both my family and for Yahoo; both will require hard work and thoughtful prioritization,” she wrote in her post.
Marissa Mayer added: “However, I’m extremely energized by and dedicated to both my family and Yahoo and will do all that is necessary and more to help both thrive.”
Yahoo’s board has approved a deal to buy New York-based blogging service Tumblr for $1.1 billion, US media reports say.
The acquisition is expected to be announced as early as Monday.
The deal was a “foregone conclusion” and was a unanimous vote by the board, tech blog AllThingsD reported, citing sources close to the matter.
If confirmed, it will be CEO Marissa Mayer’s largest deal since taking the helm of Yahoo in July 2012.
Yahoo’s board has approved a deal to buy New York-based blogging service Tumblr for $1.1 billion
Analysts say that by acquiring Tumblr, Yahoo would gain a larger social media presence and enhance its ability to attract younger audiences. It will also help Tumblr generate more revenue from advertisements.
On its home page, Tumblr says it hosts 108 million blogs, with 50.7 billion posts between them.
Under the terms of the acquisition, Tumblr would continue to operate as an independent business, the Wall Street Journal said, citing unnamed sources familiar with the situation.
About 700 million web surfers visit Yahoo’s website every month, ranking it among the top in the global industry.
However, it shed more than 1,000 jobs during 2012 and has long been divided over whether it should focus on media content or on tools and technologies.
Marissa Mayer was brought to Yahoo in last July from Google to turn the company round, and has been focusing on building better mobile and social networking services.
Yahoo! CEO Marissa Mayer reportedly made the decision to ban telecommuting at the company after checking up on how many times remote workers were logging into the company’s network and discovering it wasn’t enough.
A recently released documentary shows Marissa Mayer criticizing feminism and explaining her own approach to women’s equality. Makers is a PBS/AOL documentary about the “women who make America”.
In the film Marissa Mayer says: “I don’t think that I would consider myself a feminist. I think that, I certainly believe in equal rights. I believe that women are just as capable, if not more so, in a lot of different dimensions.
“But I don’t, I think, have sort of the militant drive and sort of the chip on the shoulder that sometimes comes with that. And I think it’s too bad, but I do think feminism has become, in many ways, a more negative word.
“There are amazing opportunities all over the world for women, and I think that there’s more good that comes out of positive energy around that than negative energy.”
As Business Insider points out, women still earn less than men at every level of education, and women hold just 17% of senior management roles in the U.S.
It has also been revealed that Marissa Mayer banned working from home as she believed employees had being taking advantage of the benefit.
In a business meeting last week Marissa Mayer noted that workers had not been logging on enough, as reported by AllThingsD.
Marissa Mayer, who places huge emphasis on the analysis of metrics and data, had studied the records of Yahoo’s Virtual Private Network (or VPN) which remote workers use and found employees hadn’t been using it as frequently as expected.
This reportedly made up her mind on the telecommuting ban.
Marissa Mayer imposed Yahoo ban on working from home after spying on employee log-ins
Last week Michael Bloomberg weighed in on the debate over working from home, as the opinionated mayor came out in support of Yahoo! CEO Marissa Mayer.
The billionaire businessman-turned-politician said that Marissa Mayer’s decision to ban telecommuting at her company was a smart one even though she came under a firestorm following the revelation that the new mom had a nursery built for her new son just prior to announcing the rule.
“I’ve always said, telecommuting is one of the dumber ideas I’ve ever heard,” Michael Bloomberg said during a radio interview on Friday.
“Yes, there are some things you can do at home. But having a chat line is not the same thing as standing at the water cooler. And standing at the water cooler is where you get a lot of ideas and information and it’s a euphemism for a lot of interpersonal dialogue,” Michael Bloomberg said according to NBC.
Marissa Mayer’s decision sparked an outcry from working mothers and other companies in Silicon Valley who blasted the hypocrisy of her banning the action but allowing herself an in-office space for her child.
Another big-name opponent was Virgin CEO Richard Branson who called the ban on working from home a “perplexing” decision.
“This seems a backwards step in an age when remote working is easier and more effective than ever,” he wrote in a post on his blog.
“If you provide the right technology to keep in touch, maintain regular communication and get the right balance between remote and office working, people will be motivated to work responsibly, quickly and with high quality.
“Working life isn’t 9-5 any more. The world is connected. Companies that do not embrace this are missing a trick.”
The Yahoo decision will only impact a small percentage of the company’s workforce, primarily customer service representatives or staffers who work in cities where Yahoo does not have an office.
But the internal announcement on Friday has ruffled feathers as many employees say the flexible work arrangement is a key part of their job and will have a significant impact on their personal lives.
Though Yahoo will not publicly comment on the internal matter, employees disclosed the new HR policy to AllThingsD co-executive editor Kara Swisher.
The move is described as harsh since it requires employees to “either comply without exception or presumably quit”.
“Many such staffers who wrote me today are angry, because they felt they were initially hired with the assumption that they could work more flexibly. Not so, as it turns out,” Kara Swisher wrote in a blog posting about the change expected to impact several hundred workers.
Yahoo! headquarters is located in Sunnyvale, California, near San Jose. The public corporation employs 11,500 people in more than 20 countries across the globe.
Marissa Mayer, a 37-year-old Silicon Valley whiz kid who was previously a big deal at Google before switching to the competition, was appointed the head of Yahoo in July 2012.
She instituted free lunches at the company headquarters and started giving out smartphones to employees.
“I want Yahoo to be the absolute best place to work, to have a fantastic culture. We’re working really hard right now to remind people about all the opportunities that are there,” Marissa Mayer said shortly after she was hired at a Fortune magazine event in November.
Yahoo has decided to ban its staff from “remote” working.
After years of many predicting working from home as the future for everybody, why is it not the norm?
When a memo from human resources dropped into the inbox of Yahoo staff banning them from working from home it prompted anger from many of its recipients.
“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” the memo said.
“Speed and quality are often sacrificed when we work from home.”
The move to get staff back into the office from June this year is thought to have been driven by new chief executive Marissa Mayer, who herself returned to work weeks after giving birth.
Virgin entrepreneur Richard Branson, who spends much of his time working on Necker Island in the Caribbean, was quick to respond, calling it a “backwards step in an age when remote working is easier and more effective than ever”.
People in the West are constantly bombarded by news about technology that makes it easier to communicate with the office. Many have fast broadband and webcams that allow their faces to appear through the ether at any important meetings. They are surrounded by smartphones, laptops and tablets.
Everything is surely there to free them from the daily commute. Those in manufacturing or retail might always have to be present, but in an age when so many work in offices, why can’t they have their office space at home?
In the US, 24% of employed people report working from home at least some hours each week, according to the Bureau of Labour Statistics.
But only 2.5% of the workforce (3.1 million people, not including the self employed or unpaid volunteers) consider home their primary place of work, says the Telework Research Network.
The myth of working from home
Yahoo is not a lone voice in espousing the virtues of physically being in the office.
Only last week Google’s chief financial officer Patrick Pichette said when the company is asked how many people telecommute, their answer is “as few as possible”.
“There is something magical about sharing meals,” Patrick Pichette explained.
“There is something magical about spending the time together, about noodling on ideas, about asking at the computer <<What do you think of this?>>”
Google workers are provided with a free Wi-Fi-enabled bus in to the HQ.
Marissa Mayer, of course, is a former Google executive.
There are obvious reasons why working from home has not proliferated in the way people thought it might. There is still ingrained cultural antipathy.
Not “being seen in the office” may affect a person’s chances of promotion, result in a smaller pay rise than office-based peers and lower performance evaluations, according to research by the London Business School and the University of California.
They stress the continuing importance of so-called “passive face time” that is being in the office, regardless of what someone is doing.
The additional pressure not to be perceived as “skiving” may drive those who do work from home to exceed their hours.
Prof. Jennifer Glass, co-author of a report on the US workforce published by the University of Texas at Austin, says for many people, especially those in their 30s and 40s, teleworking is part of their work after they have already done 40 hours in the office.
Jennifer Glass was “flabbergasted” by the Yahoo memo.
“This seems to be trying to bring Yahoo in line with corporate America, not high-tech industries,” she says.
“The idea that this is going to promote more innovation seems bizarre.”
Promoting the value of interactions in hallways and canteen seems strange at a time when face-to-face contact within the office is decreasing.
“I frequently email someone without getting up to see if they are there,” Jennifer Glass notes.
Managers can be biased in favor of those they can actually see working.
“There is this attitude that managers need to see people are close by and that those workers are more productive,” says Jennifer Glass.
“It is a natural tendency to want to control things.”
For Alan Denbigh, co-author of The Teleworking Handbook and former executive director of the Telework Association, there are proven benefits of home working.
“It gives you the opportunity to get on with a particular project and for those who are bringing up small families where it is imperative to have a degree of flexibility it works.”
Having done both he does not recommend working from home exclusively, recognizing the benefits of interacting with people in the office and the pitfalls of working long hours at home to keep up.
But he says it is “equally ridiculous” to feel you have to be at the office every day. He recommends a bit of both.
“A large corporation saying you can’t work at home, especially an IT based company, seems counter-productive. You have to treat people as grown-ups.”
Marissa Mayer, a former leading Google executive, has been appointed as Yahoo next chief executive.
Marissa Mayer, 37, will become the firm’s third CEO in the space of a year.
In a statement released by Yahoo, Marissa Mayer said she was “honored and delighted” to lead the company.
In May CEO Scott Thompson stepped down after accusations that he put a fake computer degree on his CV. In September 2011, CEO Carol Bartz was fired after two-and-a-half years in the post.
Yahoo has struggled in the face of increased competition from search rivals including Google and the emergence of social giants such as Facebook.
Although it remains the US’ largest web portal, correspondents say Yahoo’s failure to become more “social” has hurt the firm.
Its stock is now worth less than half its peak value.
Marissa Mayer, a former leading Google executive, has been appointed as Yahoo next chief executive
Yahoo’s news service still attracts very large volumes of traffic. But other products, such as its search engine and email, have suffered. The company’s revenue from display advertising has also dwindled.
Interim CEO Ross Levinsohn was thought to have been the favorite for the job before Monday’s announcement that Marissa Mayer was to take the helm.
Correspondents say the selection of Marissa Mayer to head the company suggests a renewed focus on technology and products, over online content.
“I look forward to working with the company’s dedicated employees to bring innovative products, content, and personalized experiences to users and advertisers all around the world,” Marissa Mayer said.
She becomes one of very few women in Silicon Valley to rise to the top of a major technology firm.
“A lot of people did not believe that Yahoo could get someone of the caliber of a Marissa Mayer to become the CEO at this stage,” Standard and Poor’s equity analyst Scott Kessler told Reuters news agency.
Marissa Mayer, who takes up her post at Yahoo on Tuesday, joined Google in 1999 as the company’s first female engineer.
A former computer science student at California’s Stanford University, she was the fledgling company’s 20th employee.
She worked on creating the Google search engine and the company’s widely-recognised home page.
More recently, Marissa Mayer has been in charge of the technology giant’s location and mapping services, which include Google Maps, Earth, Local and Street View.
She has been credited with shaping much of the “look and feel” of Google’s user experience.
Marissa Mayer currently serves on the boards of Walmart, San Francisco Museum of Modern Art, San Francisco Ballet and New York City Ballet. She will also join Yahoo’s board.