Yahoo to layoff 15% workforce after $4.4 bn loss
After Yahoo came out with its fourth quarter results for 2015, CEO Marissa Mayer highlighted a ‘strategic plan’ for the company ahead. The company reported a USD 4.4 billion loss for the last three months.
Mavens revenue represented 33 per cent and 28 per cent of traffic-driven revenue in the fourth quarter and full year of 2014, respectively, and increased to 39 per cent and 36 per cent in the fourth quarter and full year of 2015, respectively.
The struggling tech company also said that it plans to reduce its workforce by roughly 15 per cent this year and shut down offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan.
“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation. 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,” said Ms Mayer.
In December 2015, Yahoo haddecided to shelve plans to spin off the company’s remaining holdings in Alibaba Group Holding Limited (BABA), as announced in January 2015. Instead, the Board decided to evaluate alternative transaction structures to separate the Alibaba stake, focusing specifically on a reverse of the previously announced spin transaction.
In the new strategic plan, the tech company aims to improve consumer and advertiser product quality and grow daily active users (DAUs); drive continued growth in revenue realised through Mavens (mobile, video, native and social) to USD 1.8 billion this year; improve profitability to reach an adjusted EBITDA run rate of approximately one billion dollars by the second half of 2016; Reduce operating expenses by more than USD 400 million by the end of 2016;
Limit GAAP revenue impact of product and regional exits to approximately USD 100 million and
Explore non-strategic asset divestitures that, if consummated, could generate in excess of USD 1 billion in cash.
“The Board is committed to the turnaround efforts of the management team and supportive of the plan announced today. We have tremendous respect for the thousands of Yahoos who work very hard to make the world a better place. The Board also believes that exploring additional strategic alternatives, in parallel to the execution of the management plan, is in the best interest of our shareholders. Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximisation. In addition to continuing work on the reverse spin, which we’ve discussed previously, we will engage on qualified strategic proposals,” said Maynard Webb, Yahoo’s Chairman of the Board.
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