Are the Yahoo! Layoffs a Good Sign?
It had been rumored for weeks that Yahoo! was preparing to lay off as much as 20% of its workforce, and the company had remained relatively quiet as the media battled to get an accurate figure. On Tuesday, the company confirmed that it had let go approximately 560 employees, nearly 4% of its total workforce.
Business Insider, as it has done for previous Yahoo! and AOL layoffs, set up an anonymous forum for Yahoos to share their insights, vent their frustrations, or simply to come together in an undoubtedly tough time for the company.
Nobody likes layoffs. They can place severe hardship on employees and their families that depend on their salary and benefits to subsist, and can deal an emotional blow to employees’ confidence and feelings of self-worth. The Yahoo! layoffs are no different. But is there something positive that can be gleaned from them?
Critics have hammered Yahoo! for having an undefined mission and top executives have come under fire for not being able to answer the simple question: “What does Yahoo! do?” According to Yahoo!, the layoffs are helping the company shift its position in the market through restructuring to more successfully accomplish its short- and long-term strategic objectives.
Kara Swisher of All Things D obtained an internal memo sent to employees from Yahoo! CEO Carol Bartz, which you can read in-full here. In the memo, Bartz notes that a majority of the layoffs are in Chief Product Officer Blake Irving’s products division. Every large company has product groups that are underperforming, and eliminating these groups is a part of operating a successful business. Bartz also notes that Yahoo!’s dedication to the Microsoft Search Alliance remains strong and resources will continue to flow to the company’s key properties.
Holiday layoffs are unpleasant, but with growing pressure for Bartz to deliver on her promises to turn around the Silicon Valley tech giant, they were necessary. Tech companies must be nimble, and a heavy products division hampers the innovation Yahoo! so desperately needs. Bartz has been scrutinized by some for slashing budgets and trimming jobs while taking home $47.5 million in total compensation in 2009, making her one of the highest-paid CEOs in the country.
Yahoo! asserts these layoffs were much more than a cost-cutting measure, and Bartz acknowledges that she cannot cut Yahoo! to greatness. The layoffs are part of a comprehensive restructuring initiative, and are an integral part of the process that can allow Yahoo! to focus explicitly on its core competencies in search, content verticals, and advertising.
This is no consolation for the ex-Yahoos now out of a job, but it is a good step in the re-emergence of a company that was once one of the darlings of the Valley. As for the former Yahoos, reports of a generous severance package (two months of pay, a bonus, and outplacement services) and the fortune of being in a strong hiring environment may help soothe some of the pain of being let go.
Posted on December 15, 2010, in Uncategorized and tagged Carol Bartz, Kara Swisher, Management, Public Relations, Search Alliance, Search Engine, Silicon Valley, Yahoo. Bookmark the permalink. 8 Comments.