Yahoo Layoffs Begin, CEO Sends Employees Apologetic Letter 138
redletterdave writes "As expected, Yahoo began laying off more than 2,000 employees on Wednesday morning — roughly 14 percent of the company's total workforce — in its effort to slim down and pivot its focus in a new direction. The mass layoff marks the sixth time in four years — and under three different CEOs, no less — that Yahoo has dumped employees, but this one will the company's biggest in its 17-year history. Scott Thompson, Yahoo's CEO, sent an apologetic letter to all his employees this morning explaining the changes."
My Kif sigh. (Score:5, Insightful)
Daniel Loeb, the hedge fund manager who is also one of Yahoo's largest shareholders, has launched a new campaign to shake up Yahoo's board even further since being spurned by the company. Loeb has been trying to persuade Yahoo to elect him, as well as three other alternative candidates, as possible directors. If a truce isn't met between Loeb and Thompson, the dispute will be put to a shareholder vote at Yahoo's annual meeting.
So, this "hedge fund" guy (we called them corporate raiders back in my day. They wore an onion on their belt because that was the stye back then ... oh, yeah.) is going to can a shit load of people, reducing the expenses and boosting profits in the short term. Said "hedge fund" guy will then make a killing on his stock, options, and any warrant positions he has and flies back in his corporate jet to the bank.
In the meantime, Yahoo! not having people to actually, I don't know innovate and restructure the company to actually offer unique products will be gone. So, in the long term, Yahoo! will just be an email outsourcer for the likes of AT&T - a nice low margin commodity market.
Yep, if I were Yang et. al., I'd be unloading as fast as I can and spend the rest of my life being a philanthropist.
Nothing good of this will come of it. It never has and never will. "Hedge fund" guys know only one thing: slash and burn.
sad (Score:2, Insightful)
Re:Typical large corporations (Score:5, Insightful)
I'm a capitalist, but not a 1 percenter, and I say that you can't cut your way to profitability.
How does that affect your prediction?
Re:Yahoo is dead (Score:5, Insightful)
No, they mistakenly thought they could buy marketshare by picking up a company on the fast track to irrelevance for the better part for years leading up to the buyout bid.
Comment removed (Score:4, Insightful)
CEOs (Score:5, Insightful)
I mean, they got paid for doing a job of course. And even if they do a bad job of it, they (arguably) deserve a paycheck. But bonuses, severance pay, and perks are hard to justify when letting people go because the business if failing.
Stock options are actually a pretty good idea. If they drive the company into the ground, those aren't worth much.
With the rising costs [google.com] of "quality" CEO material, were these guys worth the investment?
Wrong question (Score:5, Insightful)
Strong companies don't have these problems with "hedge fund" guys. Weak ones do. Like nature, american enterprise and the markets can be very cruel. It seems odd to me that you complain when things work the way they are supposed to work. What did you think was supposed to happen when you don't give customers what they want? (ie: you are not successful in the marketplace - for whatever reason).
Re:Typical large corporations (Score:2, Insightful)
I'm a capitalist, but not a 1 percenter, and I say that you can't cut your way to profitability.
How does that affect your prediction?
Free market fantasies. You're a capitalist, eh? Too bad it doesn't really exist....anywhere. I hope you don't think anything that's gone on in banking, the oil industry, agriculture, uh...do i need to go on, has anything to do with a capitalist 'free market'. Has a lot more to do with fleecing the tax payer and handing the cash over to companies, who then pretend to be engaging in some kind of free market. What a bunch of bull.
Re:My Kif sigh. (Score:4, Insightful)
I dunno, turning a potentially thriving company with an illustrious history into an internet toxic waste dump while spacing 10,000 workers in a poor economy seems kind of FSCKed to me.
The only problem Yahoo has is leadership and vision. You aren't going to out Facebook Facebook or out Google Google. You need to look at the big picture, notice the human trends and come up with a selection of related new services, that others haven't seen yet. There are two dozen startups doing uber-cool things with customer information. If Yahoo had picked a couple of those up, and streamlines its offerings to unique high values services, they'd be cake walking to the bank today. Of course if it that easy, everyone would be doing it. You need to find the right geek with business acumen to carve out some new business spaces.
only in the software industry... (Score:5, Insightful)
... laying off people allows you to "get stuff done" and "be nimble". To me a company with excess workforce is a lot more likely to be nimble (easy to create ad-hoc teams to pursue new products/things) than a company at capacity where everybody is already fully tasked (where if you have a new project you HAVE to abandon some older project whether or not it makes sense to do so).
The nimbleness of a company is more of a function of how it's managed than of its size, but of course it's a lot easier to spin layoffs by pretending that a smaller company is somehow better performing than a larger one (if that was the case why would companies ever hire? it'd be much simpler to just remain "nimble" by staying small).
Re:My Kif sigh. (Score:5, Insightful)
Nothing good of this will come of it. It never has and never will. "Hedge fund" guys know only one thing: slash and burn.
And that may be the right thing to do at this point. The marker is moving -- very quickly. The pace at which it is increasing its speed is also increasing.
A company the size of Yahoo can't spend the money it needs to in order to really innovate years out, and not months out, once it gets behind the curve. They've got 17 years of legacy crap they need to continue supporting if they want to remain "Yahoo". Seventeen years worth of cruft, acquired services and the ilk. If they can't break even on those, they need to do MASSIVE restructuring to eliminate legacy support debt to even have a prayer of coming up with something new and delivering it before the market leaves that behind, too.
Microsoft can keep innovating because they've got massively profitable products and services around the majority of the support debt. Apple got where it was because it had basically failed when Jobs started to turn it around. (It'll be interesting to see if they can continue to innovate as they end up with a half billion people they need to keep happy... I own a lot of Apple stock, and I have to say that Cook's tenure so far has me pretty nervous from that standpoint!)
Yahoo, though? The scenario you described may be in the best short and long term interest of both the employees and the stockholders. The 2000 people laid off are 2000 people getting severance while there is money to be had, and have the opportunity to get into a company that has a better chance. And if they trim it enough, shed enough services, get the company lean enough that it can invest in real future-looking research, maybe some of the employees left will be able to weather that storm.
Its short sighed to assume that you can wish a company into success, and sometimes the safer bet is to be honest about where you are and where you can get from there.
Re:We need new laws governing layoffs (Score:5, Insightful)
other factors external to the business that result in minor profits for the next three years and the stock returns to its previous low levels
When Rome is burning, it's externalities. When it's growing, it's entirely due to the CEO's guidance. If, after two years, the stock has returned to it's previous state, then the CEO's amazing work wasn't all that amazing.
If they complain about it not being fair, the response is the same as the one they gave during the bust years.
"Well there are externalities"
This wasn't the best example for you to pick, please try again.
Re:My Kif sigh. (Score:5, Insightful)
They didn't exist for several years after 1991.
And add a few more years here. Are you thinking around 1998?
No. When Yahoo! was on the way up, no one left, willingly or unwillingly. Their first layoff was in 2001. Since I was working there, I remember :-)
Now you're just making stuff up. Yahoo's not a good company, but they never "historically [..] always" did this. If they do this now, it's a new practice within the last half a decade (since I left).