Yahoo announced on Tuesday that it will be lay off about 1,700 (15%) of its employees, as it continues with its plan to revamp the business and spin it off.
The Sunnyvale Company added that it would explore “strategic alternatives” as part of its restructuring.
The announcement came alongside a dismal fourth quarter earnings, where it reported revenue of $1.27 billion and earnings per share of 13 cents.
Yahoo CEO Marissa Mayer today announced a slew of changes at the company in order to prove to investors that it still has a real future as a tech giant. “Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” Mayer said in a statement. “This is a strong plan calling for bold shifts in products and in resources.”
Yahoo’s move to mull its options, confirming a report earlier Tuesday by The Wall Street Journal, sets the stage for a possible bidding war between a widerange of potential buyers. About 1 billion people a month travel collectively to Yahoo’s home page, email and other sites, making them an attractive asset to media conglomerates.
The announcement is the strongest sign yet that the board and Chief Executive may be willing to sell the struggling Internet business, essentially websites, email and online search, under growing pressure from impatient shareholders.
“We would obviously engage but I think the one thing we’re trying to do is set our shareholders’ expectations in terms of complexity,” Mayer told Reuters.
At the moment, Yahoo is focusing on trimming costs to make it more attractive to investors or buyers. Yahoo said that by the end of 2016, it anticipates having about 9,000 employees and fewer than 1,000 contractors, which represents a workforce that is roughly 42% smaller than it was in 2012. The company sees the cuts resulting in savings of $400 million a year.
Mayer also hopes to sell some of Yahoo’s patents, real estate and other holdings for $1 billion to $3 billion.
Products to be dumped include Yahoo Games, Yahoo TV and some of the digital magazines that Mayer started as CEO. She will also close offices in Dubai, United Arab Emirates; Mexico City; Buenos Aires, Argentina; Madrid and Milan.
Mayer expressed confidence that her plan to run Yahoo as a smaller, more focused company “will dramatically brighten the future and improve competitiveness and attractiveness to users, advertisers, and partners.”