In its sharpest job cuts yet, struggling online giant Yahoo! this week announced that it will lay off 2,000 employees, or about 14 percent of its workforce. That will save the firm some money, but what shareholders and analysts are looking for, still, is any hint of a plan to turn around the once-mighty Internet services company.
First, however, Yahoo! says it must become a smaller, faster-moving company.
"Today's actions are an important next step toward a bold, new Yahoo!—smaller, nimbler, more profitable, and better equipped to innovate as fast as our customers and our industry require," Yahoo! CEO Scott Thompson said in a prepared statement. "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose—putting our users and advertisers first—and we are moving aggressively to achieve that goal."
Yahoo! cites its "solid foundations"—more than 700 million active users and thousands of advertisers—and that the company has identified, if not communicated, "key parts of the business ... where the company will intensify efforts and redeploy resources globally." These parts vaguely include a small group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization, providing value for both users and advertisers, Yahoo! claims.
But it is perhaps telling that the deepest jobs cuts are coming from Yahoo’s product division, which oversees its consumer and advertising products, according to the New York Times, which cites unnamed people inside Yahoo!. This division, headed by ex-Microsoftie Blake Irving, was once seen as the future of the company. So, a logical guess is that Yahoo! now sees itself more as a content company than a technology products and services company.
We'll have to wait on the official word from Yahoo! on that, however. CEO Thompson, who took the helm at the troubled firm just three months ago, is still reviewing the business and has engaged outside consultants to help. He has pledged to employees that he will institute "real change" at Yahoo!.
Yahoo! currently employs about 14,000 people.