Yahoo! to Cut 15% of Staff After $4.36 Billion in Losses

Yahoo Job CutsYahoo! Inc. (NASDAQ:YHOO) released earnings after the closing bell on Tuesday, February 2nd, 2016. The results were a godsend to analysts who were looking for a turnaround in YHOO stock.

Yahoo reported annual losses of $4.64 per share on revenue of $4.97 billion. Quarterly earnings were also negative, at $4.70 per share on $1.27 billion in sales. The fledgling internet giant had expected revenue to drop under $1.00 billion for the first time in almost a dozen years. (Source: “Yahoo Reports Fourth Quarter and Full Year 2015 Results”, Yahoo! Inc. Press Releases, February 2, 2016.)

More importantly, CEO Marissa Mayer gave investors a signal of what could happen to Yahoo. Rumors have been spreading about mass layoffs. The controversial chief executive is now suggesting the company will pare back its product range to email, search, and Tumblr, while also cutting 15% of its workforce.

“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” said Marissa Mayer, CEO of Yahoo. “This is a strong plan calling for bold shifts in products and in resources.” (Source: “Yahoo To Improve Profitability and Accelerate Growth By Sharpening Focus”, Yahoo! Finance Press Releases, February 2, 2016.)

The plan could end up with a version of Yahoo that has only 9,000 employees. That is roughly 42% of the company’s labor force circa 2012.

Yahoo’s share price is down 1.2% in after hours trading.

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