Home Industry Listed Tech Yahoo about to lay off thousands?

The word is - radical head-count cuts at Yahoo, particularly in the International divisions.

According to a recently-ex insider's account, Yahoo is "bloated, top heavy and needs to be shaken up."

Michael Smith (Yahoo's Director of Global Teach Initiatives until February 2012) goes on to say, "Problem is the rank and file have been leaving all along and most of the hires have been more management. I can't begin to count how many new execs have been brought in from MSFT over the past 2 years - all of whom, great people aside, have been doing more planning than doing. We used to joke that although MSFT didn't actually buy Yahoo - for the most part MSFT was running Yahoo."

Sounds a lot like a used-to-be-popular mobile phone company we all know of.

This ex-insider goes on to analyse Yahoo's search business (it replaced its own search engine with Microsoft's but forgot to get rid of the internal search team!); all of the acquisitions that achieved nothing (with a few successes - Yahoo7, Alibaba); the slowly-sinking advertisement business, the Facebook patent suit (Yahoo was screwed by Facebook on that deal and is trying to claw something back) and the entire scatter-shot focus within the company.

Incidentally, with respect to Yahoo7, he notes, "The Yahoo 7 business [...] is a JV that adds revenue to Yahoo's bottom line. Yahoo could sell the portion they don't own. Or they could float the JV. This is the one JV that still is on friendly terms and is a good business but Sunnyvale hardly pays attention to it."  I'm sure our friends at Channel Seven would be very pleased to hear that.

Anyway, back to the layoffs.

With regard to layoffs, Smith notes, "I am sure layoffs are imminent. My guess is that Yahoo could easily cut 20 to 25% of it's staff without actually cutting much of its capabilities. Many of us used to joke that Yahoo could put google adsense on a lot of it's content properties and probably make more money - especially once you get rid of the ad tech people, sales people and client support people.

Which brings us to Kara Swisher's column over at All Things D where she tells us, "Yahoo is preparing to begin layoffs of what could be thousands of employees starting next week, according to multiple sources, and is then expected to announce a new restructuring of the company the week after."

With this in mind, PandoDaily is reporting that the US layoffs are all set for Wednesday, with the International ones to happen Thursday (which in most parts of the world is about the same time).  All suggested here is that the layoffs and plans already in train (Facebook action etc) represent only a quarter of the moves planned by new CEO Scott Thompson and the Boston Consulting Group "hit squad" currently holed up in the Executive Suite.

As yet, there is no word on the size of the lay-offs, but expect them to be both broad and deep; just watch out for the hiring rebound - there's been one every single time Yahoo has indulged in a round of lay-offs, which is why the head-count has never been far from 14,000 for any real length of time.

However, let's give the final word to the anonymous commenter 'TrulY_Sad' at one of the sites linked previously.  "seriously Yahoo! how can our 10 most senior leaders sit in a room together and the result is that we have to read about it from a third party in public. Your lack of respect for the people who work here is truly disheartening..."


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David Heath

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David Heath has over 25 years experience in the IT industry, specializing particularly in customer support, security and computer networking. Heath has worked previously as head of IT for The Television Shopping Network, as the network and desktop manager for Armstrong Jones (a major funds management organization) and has consulted into various Australian federal government agencies (including the Department of Immigration and the Australian Bureau of Criminal Intelligence). He has also served on various state, national and international committees for Novell Users International; he was also the organising chairman for the 1994 Novell Users' Conference in Brisbane. Heath is currently employed as an Instructional Designer, building technical training courses for industrial process control systems.






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