Yahoo layoffs have begun today, as Mayer tries to turn around her turnaround
Yahoo layoffs have begun today, according to numerous sources, with conference rooms across all its facilities reserved to tell employees that they have been fired.
Sources said the cuts are deep and widespread, up to 15 percent of the staff of the Silicon Valley Internet giant that has not been able to gain ground under its latest CEO, Marissa Mayer. That’s more than 1,500 jobs, with cuts coming in media and sales. Yahoo’s search efforts have been largely spared the ax, since it is an area that Mayer thinks is poised for growth.
She has a plethora of outside advisers helping her make the cut, especially McKinsey & Co. Others — such as Goldman Sachs and Qatalyst Partners — are helping the company wade through a number of other thorny issues, including the separation of its stake in China’s Alibaba Group.
Mayer has been trying to turn around the company for several years and now is trying to turn around that turnaround. It’s all now against a backdrop of investor unrest, a potential proxy fight and what appears to be a split with the board. In its earnings last week, the directors indicated publicly that they are open to selling the very core Internet business that Mayer has vowed to fix.
So many sources I had to turn off my phone to stop the incoming calls from inside and outside the company said Mayer is not making that process easy, including not leading important due diligence efforts that would be important to a sale.
“She won’t return our call,” said one potential buyer, who is just the kind of buyer that could buy Yahoo. Last week, Mayer said the sale talks were in the hands of the independent directors, a statement that is just not so. As anyone with only passing knowledge knows, the CEO of a company is critical to any such process to make it work and cooperation is a must.
Is it confusing? You betcha! But not as perplexing as the layoffs have been for the company, including a number of botched firings, as well as internal turmoil over just what was being cut.
All this will surely play into the hands of activist shareholder Jeff Smith of Starboard Value, who has been mulling an attack that should come within the next week if it is happening. He’s seeking board seats obviously. And, if successful and in all likelihood given how these things tend to go, the departure of Mayer.
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