Yahoo 'to shed over 1,000 jobs in effort to cut costs'

Yahoo CEO Mayer, who is looking for new ways to boost growth, said in October that the portal will unveil a fresh set of objectives on or before the release of its fourth-quarter results, expected in the coming weeks.
Yahoo CEO Mayer, who is looking for new ways to boost growth, said in October that the portal will unveil a fresh set of objectives on or before the release of its fourth-quarter results, expected in the coming weeks.PHOTO: REUTERS

SAN FRANCISCO • Yahoo is planning to eliminate jobs as part of chief executive officer Marissa Mayer's effort to cut costs and revive growth at the struggling Web portal, according to a person familiar with the matter.

The plan will help the company streamline operations, said the source, who asked not to be identified because the matter is private.

The layoffs, which would result in more than 1,000 people leaving the tech giant, are set to affect Yahoo's media business, European operations and platforms-technology group, Business Insider said on Wednesday.

Ms Mayer said in October that the portal will unveil a fresh set of objectives on or before fourth- quarter results, expected to be announced in the coming weeks.

Ms Mayer, more than three years into a turnaround effort, is looking for new ways to bolster growth and beat back competition from rivals even as she comes under growing investor scrutiny, including over how she is handling a valuable stake in Alibaba Group.

On Wednesday, activist shareholder Starboard Value called on the company to overhaul its management and board, saying that "significant changes" were needed at the company.

Ms Mayer said on a call with analysts in October: "We see a unique moment and opportunity for Yahoo as we move into 2016 to narrow our strategy and focus on fewer products with higher quality to achieve better growth and better results.

"We will share the details of this plan in which we aim to delineate our focus, improve our execution and define our relevance to users at our next earnings release, if not before."

A holder of less than 1 per cent of Yahoo's shares, Starboard has been agitating for change for months. The letter unveiled on Wednesday signals an escalation of the investor's dismay with how the company is being run and is its first public statement since Yahoo decided last month to shelve plans to spin off the Alibaba stake.

The remarks are also the strongest indication yet that Starboard is gearing up for a so-called proxy fight aimed at unseating directors when the board meets next.

Yahoo had appointed management consulting firm McKinsey & Co in November last year to help with the reorganisation of its core businesses.

The company also had plans to make big changes to its media unit, restructuring and consolidating it, including making cuts and shuttering some efforts.

Last month, Yahoo shelved plans to spin off the Alibaba stake and said it would create a separate company that would house Yahoo's Internet business and its stake in Yahoo Japan.

Ms Mayer has already been trimming staff. At the end of the third quarter, the company had 10,700 full-time employees and just under 800 contractors, bringing the overall headcount down 14 per cent year on year.

During the call with analysts in October, Ms Mayer said the company would continue to be disciplined with its headcount.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on January 08, 2016, with the headline 'Yahoo 'to shed over 1,000 jobs in effort to cut costs''. Print Edition | Subscribe