The mass exodus of Yahoo! executives has reached its peak – CEO Carol Bartz has been fired by Chairman of the Board, Roy Bostock. Timothy Morse has been named interim CEO, according to a Yahoo! press release titled “Yahoo! Announces Leadership Reorganization.” Though many saw this move coming, the timing was certainly a surprise. Late Tuesday evening, Bartz sent a short note to Yahoo! employees worldwide confirming her firing:
Roy Bostock, Chairman of the Yahoo! Board, said, “The Board sees enormous growth opportunities on which Yahoo! can capitalize, and our primary objective is to leverage the Company’s leadership and current business assets and platforms to execute against these opportunities. We have talented teams and tremendous resources behind them and intend to return the Company to a path of robust growth and industry-leading innovation. We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders.”
Bostock continued, “On behalf of the entire Board, I want to thank Carol for her service to Yahoo! during a critical time of transition in the Company’s history, and against a very challenging macro-economic backdrop. I would also like to express the Board’s appreciation to Tim and thank him for accepting this important role. We have great confidence in his abilities and in those of the other executives who have been named to the Executive Leadership Council.”
(The internal memo sent from Jerry Yang and the Board to Yahoo! employees moments after the announcement can be read in its entirety here.)
The troubles at Yahoo! have been well-documented over the last five years, and the tune did not change under the tenure of Bartz. The revelation by Bartz that her firing was executed over the phone is symbolic of the disastrous corporate messaging and human resource mismanagement that has characterized the company of late. The company has endured one of the greatest brain drains in history, which has only accelerated its downward slide in recent years. The psychological impact of Bartz’s departure – both on investors and employees – will be intriguing to note in the coming days and weeks. Early reactions from the market are favorable – Yahoo! shares are up 5.7 percent in after-hours trading on the news.
It has been speculated that Yahoo! has been actively searching for a replacement for months. Will Yahoo! bring in another outsider or will it promote from within? There is a powerful argument to be made that the high-profile executive exodus over the last two years has left Yahoo! with no alternative but to bring in another outsider to attempt another turnaround.
Read more from the always insightful Kara Swisher at AllThingsD here.
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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.
Recently, Yahoo! scored some free press when about 600 employees (including CEO Carol Bartz) turned the tables on the tech giant’s self-proclaimed “obsessive” Wall Street Journal media reporter, Kara Swisher (http://kara.allthingsd.com). The standing-room-only event was the first in the company’s new speaker series titled “Yahoo From the Outside In”, offered employees, often hounded for inside information by Swisher, and opportunity to pry into Kara’s business for a change.
Photo courtesy of AllThingsD
An event like this can not only boost employee morale and foster a better and more complete understanding of both perspectives, but it can also provide the company with some easy media coverage. After all, I’m talking about it, and you’re reading about it. In this prior post detailing how a company can promote itself for free, I touched on the idea that interacting with the press can boost awareness for the business. This isn’t exactly what I had in mind, but it’s accomplishing the same goal in an innovative manner.
For more coverage on the event and to view her original posting, visit Kara Swisher (@karaswisher) on the web at: http://kara.allthingsd.com/20100208/turning-the-tables-carol-bartz-grills-boomtown-in-the-yahoo-cafeteria-over-easy-with-a-side-of-disclosure/