Yahoo is set to lay off 1,700 employees – around 15% of its total workforce – as chief executive Marissa Mayer announces a new raft of changes to bring the company back to profitability.
The company yesterday (2 February) revealed fourth quarter revenues of $1.3bn. However, it recorded a $4.36bn net loss for the full year 2015, after taking a $4.5bn charge from the revaluation of assets such as Tumblr – the $1bn acquisition whose value it has cut by $230m.
Under increasing pressure from investors, Mayer admitted Yahoo maybe pushed into offloading its primary internet advertising business, telling investors it is considering “strategic alternatives”.
Yahoo has suffered continued difficulties attempting to spin-off its stake in Chinese ecommerce giant Alibaba – worth an estimated $25bn – and it is now looking to cut its cloth elsewhere.
Content products including Yahoo Games and Yahoo Screen will be axed, and offices in five markets – Dubai, Mexico City, Buenos Aires, Madrid and Milan – are to be closed, with 1,700 employees departing in 2016, saving $400m annually.
Yahoo will continue to focus on its ‘Mavens’ strategy to build revenues around mobile, video, native and social products, and will focus efforts on its search, email and Tumblr platforms.
“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” said Mayer.
“This is a strong plan calling for bold shifts in products and in resources. We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social. Our strategic bets in Mavens have enabled us build an entirely new, forward-leaning business of tremendous scale and growth in just three years.
“The plan announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners,” she added.
Yahoo global chief revenue officer Lisa Utzschneider last year hinted at the changes to come, telling M&M Global that Yahoo would provide advertisers with “greater clarity” about its offering and the role played by Tumblr.