Yahoo prepares to shed 10% of workforce
Thu 7 Jan 2016
According to ‘sources familiar with the situation’, crisis-stricken former internet behemoth Yahoo has laid the groundwork for the removal of 10% of its current employees, a loss of around a thousand jobs.
One source told Business Insider that the layoffs are set for this quarter, and commented to the site that it will announce ‘additional plans for a more focused Yahoo on or before our Q4 earnings call’ in the next few weeks. Sectors of the company expecting to be particularly hard-hit by the restructuring include its European operations, media endeavours and its platform-technology group, which also provides much of Yahoo’s underlying technical infrastructure.
The company’s engagement of management consultants McKinsey & Co. in November was the first sign of a radical new initiative in CEO Marissa Meyer’s three-year campaign to turn Yahoo around from its irrecoverably lost ground in internet search in favour of new consolidations in publishing – despite better-funded opposition from Facebook and Google in this regard.
Earlier in the week Yahoo shut down Yahoo Screen, its platform for original programming, having lost its market acumen in this sector to the more committed resources of Netflix, Amazon and Google. Additionally the company scaled back contractor investment in its production output for two weeks late in 2015 as a cost-cutting measure.
Yahoo seems intent still on building out its digital magazine sector, and in this respect is gambling on the continuing demand for a 20th-century paradigm in a market dominated by immediacy and ad-hoc marketing and distribution.
Yahoo lost over $3.5 billion a year ago after a crash in its considerable shares in Alibaba, following a disappointing third quarter from that company. Additionally Yahoo’s purchase of the Tumblr photo-blogging platform in 2013 for $1.1 billion has not led so far to any effective monetisation strategies, as the company struggles to make changes without alienating the vast extant user-base.