Yahoo Cuts 15% of Its Workforce to Return to Profitability
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.