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Yahoo Begins Layoffs Amid Confusion

Yahoo Begins Layoffs Amid Confusion
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Sabrina Son

Sabrina is the editor in chief for TINYpulse news. She's dipped her toes into various works of writing — from retail copywriter to magazine editor. Her work's been featured in Forbes, Bloomberg BNA, and Tech.co.

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After years of declining profits and multiple CEOs unable to turn the company around, Silicon Valley giant Yahoo began laying of 15% of its workforce this week. The process seems to be especially chaotic, according to Kara Swisher, writing for re/code. At the heart of the story is what appears to be a serious breakdown between CEO Marissa Mayer and Yahoo’s board of directors.

Yahoo is looking to reduce its workforce by 1,500 people, and the cuts are concentrated in the company’s media and sales departments. Yahoo’s search team is being spared since apparently Mayer sees it as a remaining area of opportunity for Yahoo.

After reportedly maintaining her own “invest/maintain/kill” list to help pinpoint who would stay and who would go, Mayer is finalizing the layoffs in consultation with McKinsey & Co., Goldman Sachs, and Qatalyst Partners. These firms are also helping Mayer think through a range of challenges, including how to separate Yahoo from its stake in China’s Alibaba Group.

11 years ago, Yahoo co-founder made a $1 billion bet on Chinese businessman Jack Ma, who went on to build the now massive Alibaba Group. Yahoo sold half its stake in Alibaba four years ago over Yang’s objections, shares that would now be worth about $32 billion dollars. Fortunately, Yahoo held on to a similar number of shares, and it’s the value of those shares that’s allowed the once-powerful internet giant to survive. Yahoo’s now planning to keep its stake in Alibaba and sell off its internet core.

During an earnings call last week, the board reportedly stated their interest in selling off the internet business at the same time Mayer was saying she still hoped to fix it. People have also accused the CEO of making a sale more difficult by ignoring phone calls from serious potential buyers.

Whatever is going between Mayer and her board, the investment community is perplexed, and at least 15% of Yahoo’s workforce has no choice but to move on.

Sabrina Son

Sabrina is the editor in chief for TINYpulse news. She's dipped her toes into various works of writing — from retail copywriter to magazine editor. Her work's been featured in Forbes, Bloomberg BNA, and Tech.co.

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