Yahoo to cut workforce by 15 percent
This may be Marissa Mayer’s last shot.
Yahoo on Tuesday issued a lengthy plan to simplify the company and narrow its focus.
Yahoo’s revenue has been shrinking through most of Mayer’s reign, even though she has spent more than $3 billion buying more than 40 companies, while bringing in new talent and developing mobile applications and other services created to attract more traffic and advertisers. In a comment to Techly, Yahoo7 noted that “the recent Yahoo announcements will not affect our 2016 strategic plan or local team”.
The company said on Tuesday it would close offices in five locations, pare down its products, shift more resources to mobile search, and sell some non-strategic assets such as real estate and patents.
Traffic acquisition costs (TAC), the amount Yahoo spends to attract users to its websites, rose to $271 million in the fourth quarter ended December 31, from $74 million a year earlier.
Yahoo’s revenue – after deducting fees paid to partner websites – fell to $US1 billion from $US1.18 billion. That sets the stage for faster innovation and quicker growth in key metrics like page views, according to Yahoo.
In an interview with Reuters, Mayer said the company will entertain offers as they come but its first priority is the turnaround plan.
Play to Strengths to Grow User Engagement. “But perhaps this plan will quiet the company sale rumors for the time being”. It basically hit that, doing a little better ($1.25 billion a year ago in the same period and $1.27 billion this year). In response, Yahoo said it is shifting toward performance and programmatic ads.
Yahoo said that the move will leave the company with 9,000 employees worldwide and under 1,000 contractors. Among the cost-cutting efforts is the closure of offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan.
Mayer still announced a transformation plan to return to “modest and accelerating” growth in 2017 and 2018. He added that Yahoo will continued to work on its reverse spinoff of the core business and “will engage on qualified strategic proposals”.