- Announcement expected by earnings report in coming weeks
- CEO Marissa Mayer facing pressure from investors for revival
Yahoo! Inc. is planning to eliminate jobs as part of Chief Executive Officer Marissa Mayer’s effort to cut costs and revive growth at the struggling web portal, according to a person familiar with the matter.
The plan will help the company streamline operations, said the person, who asked not to be identified because the matter is private. Mayer said in October the portal will unveil a fresh set of objectives on or before fourth-quarter results, expected to be announced in the coming weeks.
Mayer, more than three years into a turnaround effort, is looking for new ways to bolster growth and beat back competition from rivals even as she comes under growing investor scrutiny, including how she is handling a valuable stake in Alibaba Group Holding Ltd. On Wednesday, activist shareholder Starboard Value LP called on the company to overhaul its management and board, saying that “significant changes” were needed at the company.
“We see a unique moment and opportunity for Yahoo as we move into 2016 to narrow our strategy and focus on fewer products with higher quality to achieve better growth and better results,” Mayer said on a call with analysts in October. “We will share the details of this plan in which we aim to delineate our focus, improve our execution, and define our relevance to users at our next earnings release, if not before.”
A holder of less than 1 percent of Yahoo’s shares, Starboard has been agitating for change for months. The letter unveiled Wednesday signals an escalation of the investor’s dismay with how the company is being run and is its first public statements since Yahoo decided in December to shelve plans to spin off the Alibaba stake.
The remarks are also the strongest indication yet that Starboard is gearing up for a so-called proxy fight aimed at unseating directors when the board meets next.
In December, shareholder Canyon Capital Advisors told the Yahoo board it needs to prioritize selling off some assets, the core operations or the whole business.
Mayer has already been trimming staff. At the end of the third quarter, the company had 10,700 full-time employees and just under 800 contractors, bringing overall head count down 14 percent year-over-year. Mayer said the company would continue to be disciplined with headcount during the call with analysts in October.
Business Insider reported on pending job cuts earlier.