Yahoo confirms job cuts as part of strategic plan
CEO comes under pressure as Yahoo reports huge loss in last three months
Yahoo's chief executive Marissa Mayer announced the company's strategic saving plan involves cutting 15% of its workforce, along with office closures and terminating projects.
The announcement comes as the struggling tech giant reported a $4.4bn loss in the last three months of 2015, forcing its shares to drop down to 1.2%. Overall shares have fallen 36% in the past 12 months.
Mayer revealed part of Yahoo's strategic plan included roughly 1,700 redundancies, plus products including Yahoo Games, Yahoo TV, and some digital magazines are also expected to be dropped. The plan will also see five regional office closures: Dubai, Mexico City, Buenos Aires, Madrid and Milan, all by the end of 2016.
"Today, we're announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo's transformation," said Mayer. "This is a strong plan calling for bold shifts in products and in resources."
Mayer further expressed confidence that her plan to run Yahoo as a smaller, more focused company "will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners."
The plan is designed to save about $400m annually.
Despite Mayer's confidence, investors have questioned her plan as Yahoo's stock fell 34 cents to $28.72. However, Yahoo's chief financial officer, Ken Goldman, said the reaction from investors was ‘neutral' and that both Mayer and he made mistakes that they plan to now correct.
Maynard Webb, Yahoo's chairman, said in a release: "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."