Yahoo to cut 1,700 workers as company slims down
Under a plan from Yahoo President and CEO Marissa Mayer, the company will cut roughly 15% of its workforce in the first quarter of 2016.
Cuts, layoffs and losses were the name of the game with Yahoo Inc.’s fourth-quarter earnings.
The Internet company reported $1.27 billion in revenue, up only 1.58% from the same period a year earlier. When it came to profit, Yahoo swung to a steep loss of $4.43 billion, or $4.70 a share, in the fourth quarter. Adjusted for one-time events, it earned 13 cents a share.
Earnings were announced after the stock market closed. In regular trading Tuesday, Yahoo’s stock price fell 1.74% to 29.06. In after hours trading, shares dropped almost 2%.
While the company beat Wall Street expectations, Yahoo Chief Executive Marissa Mayer acknowledged it was time for a turnaround, and laid out a plan to both focus and consolidate the company.
Under the plan, Yahoo will trim its workforce by roughly 15% in its first quarter in 2016 and also shut down its offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan.
By the end of the year, the company will have approximately 9,000 employees and fewer than 1,000 contractors. This represents a workforce that is roughly 42% smaller than it was in 2012, shortly before Mayer took the helm as CEO.
The cuts are expected to save Yahoo $400 million in annual operating expenses.
Going into the fourth-quarter earnings, analysts had anticipated significant cuts across the board.
“We believe the quarterly results and guidance will take a backseat,” Mizuho Securities analyst Neil Doshi wrote in a note to investors Monday. “We believe [Mayer] will have to announce bold moves in order to appease activist shareholders as well as a growing list of unhappy current investors in the company.”
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