Layoffs! Lawsuits! Losses! ... Yahoo! is! in! an! L! of! a! mess!
15 per cent of staff axed, bits likely to be sold off, $4bn loss for the year
Yahoo! is seeing matters go from bad to worse this week as the Purple Palace says it will be cutting 15 per cent of its staff and looking at possible sell-offs, all while writing off $4.4bn of business value.
The former Jerry and David's Guide to the World Wide Web said that it would be axing staff and dropping products as part of an effort to turn around an ongoing parade of poor financial results.
The cuts will include closing offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan, and the end of products such as Games and Smart TV. The cuts will reduce Yahoo!'s ranks to 9,000 employees and fewer than 1,000 contractors, and save an estimated $400m in operating costs.
Additionally, Yahoo! plans to sell off around $1bn worth of its holdings, including real estate and patents.
The moves are part of what CEO Marissa Mayer is pitching as a plan to focus on the Search, Mail and Tumblr products as well as the Gemini and BrightRoll advertising networks. Ultimately, Mayer hopes to return Yahoo! to positive revenue growth sometime next year.
"We believe these changes will improve our course and influence a positive change on our earnings," Mayer said today while announcing her company's Q4 and full-year financial results for 2015.
This as Yahoo! is reporting a $4.43bn goodwill impairment (read: write-off) on the value of its US, Canada, Latin America, Europe and Tumblr business units. That led to the Purple Palace recording a net loss of $4.435bn in the final three months of 2015 (down from a net income of $166m in the year-ago quarter) and a full-year loss of $4.359bn (way down from the previous year's net income $7.5bn).
Revenues for the final quarter of 2015 were $1.273bn (up a smidge from $1.25bn a year ago) and for the full year, $4.968bn (up from 2014's $4.618bn). So sales remained flat over the year, and the biz plummeted hard into the red.
Mayer's recovery plan, meanwhile, may not come to fruition, as Yahoo!'s board acknowledged it would entertain "strategic alternative" offers, possibly the sale of the core business – something investors have been pushing for in recent months.
"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," said Chairman Maynard Webb.
If that wasn't enough, the Purple Palace also finds itself the target of a discrimination lawsuit from a former employee. Gregory Anderson filed against Yahoo! in the San Jose District Court accusing the company of gender discrimination and wrongful termination.
The suit [PDF] alleges that Yahoo!'s Quarterly Performance Review process, under which Anderson says he was terminated, was abused to unfairly target male workers; it seeks an excess of $75,000 in damages.
Yahoo!'s stock price was down 1.76 per cent in after-hours trading to $28.55. ®