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Yahoo Layoffs Begin, CEO Sends Employees Apologetic Letter

samzenpus posted more than 2 years ago | from the so-long-farewell-aufwiedersehn-goodbye dept.

Businesses 138

redletterdave writes "As expected, Yahoo began laying off more than 2,000 employees on Wednesday morning — roughly 14 percent of the company's total workforce — in its effort to slim down and pivot its focus in a new direction. The mass layoff marks the sixth time in four years — and under three different CEOs, no less — that Yahoo has dumped employees, but this one will the company's biggest in its 17-year history. Scott Thompson, Yahoo's CEO, sent an apologetic letter to all his employees this morning explaining the changes."

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138 comments

Yahoo is dead (4, Informative)

Lunix Nutcase (1092239) | more than 2 years ago | (#39576117)

And Ballmer sighs with relief at not having bought this turkey.

Re:Yahoo is dead (0)

Anonymous Coward | more than 2 years ago | (#39576163)

And Ballmer sighs with relief at not having bought this turkey.

-- Microsoft was trying to destroy Yahoo through their purchase offers

Re:Yahoo is dead (4, Insightful)

Lunix Nutcase (1092239) | more than 2 years ago | (#39576329)

No, they mistakenly thought they could buy marketshare by picking up a company on the fast track to irrelevance for the better part for years leading up to the buyout bid.

Re:Yahoo is dead (1)

Hatta (162192) | more than 2 years ago | (#39576221)

Boohoo for Yahoo.

Re:Yahoo is dead (1)

Anonymous Coward | more than 2 years ago | (#39576291)

Yahoo! is quite successful in Asia. They may mostly die in the US, but I would guess that they will follow the same path as 7-Eleven and Mister Donut, both of which are few and far between in the US but literally everywhere in Japan and Taiwan.

Re:Yahoo is dead (2)

The Dancing Panda (1321121) | more than 2 years ago | (#39576749)

I have 4 7-11's on my street, and would beg to differ.

Re:Yahoo is dead (2)

DougReed (102865) | more than 2 years ago | (#39576795)

What??? 7-Eleven is few and far between? What part of the US do you live in? I spend a great deal of time both in southern California and southern Florida, and I have a 7-Eleven on every corner.

Re:Yahoo is dead (1)

MaWeiTao (908546) | more than 2 years ago | (#39577803)

Around here they are practically non-existent. There are none in my city, although there are 12 within a 20 mile radius. I'm definitely not going to drive 4 miles just to go to the closest 7-11.

Re:Yahoo is dead (1)

LordLimecat (1103839) | more than 2 years ago | (#39578253)

In the DC metro area they are everywhere. I daresay there are more 7-11s in a 10 mile radius of DC than there are Starbucks.

Re:Yahoo is dead (0)

Anonymous Coward | more than 2 years ago | (#39577849)

I only have a 7-11 on one corner a few blocks down from me. I'm feeling a little left out, here.

Re:Yahoo is dead (4, Funny)

Anonymous Coward | more than 2 years ago | (#39576391)

Canned "I'm so sorry" letter, probably copied it off of the Internet using Google Search.

Re:Yahoo is dead (1)

crazyjj (2598719) | more than 2 years ago | (#39576641)

Somewhere I picture Jerry Yang getting drunk and calling up his remaining friends every night to rant about how it totally wasn't a mistake to turn Microsoft down.

Re:Yahoo is dead (2)

eminencja (1368047) | more than 2 years ago | (#39577127)

I hope it's not dead. I use both Gmail and Yahoo! mail and I find Y! far superior. Plus D.C. talks on JavaScript rock.

Re:Yahoo is dead (1)

rsborg (111459) | more than 2 years ago | (#39577195)

And Ballmer sighs with relief at not having bought this turkey.

You think Yahoo would have kept all of it's employees pre-merger with Yahoo? Look at what happened to Skype. No, it would likely have ended up nicer for the shareholders, but the same for the employees - but 1-2 years earlier.

Re:Yahoo is dead (1)

Anonymous Coward | more than 2 years ago | (#39577461)

Yahoo! is now !Yahoo

Re:Yahoo is dead (1)

TrippTDF (513419) | more than 2 years ago | (#39577893)

I wonder if things would have been different under Microsoft management. Would Microsoft have folded it's better Bing technologies under the better-known Yahoo! Brand? (For example, Bing maps could have been the improved Yahoo maps) Would Microsoft have cut this number of people from Yahoo, or would none of those cuts ever happened?

So much for Bing (-1)

Anonymous Coward | more than 2 years ago | (#39576169)

Guess the deal with the devil didn't help much. Fools. Too bad about MS' new toy Nokia.

Typical large corporations (-1, Flamebait)

Anonymous Coward | more than 2 years ago | (#39576225)

Typical large corporations firing employees. Of course the capitalists and 1 percenters will try to pretend that hiring these people in the first place somehow makes up for the travesty of firing them.

Re:Typical large corporations (4, Insightful)

humphrm (18130) | more than 2 years ago | (#39576271)

I'm a capitalist, but not a 1 percenter, and I say that you can't cut your way to profitability.

How does that affect your prediction?

Re:Typical large corporations (0)

Anonymous Coward | more than 2 years ago | (#39576337)

I'm a capitalist, but not a 1 percenter, and I say that you can't cut your way to profitability.

Yes, you can actually. Yahoo is involved in to many different projects and areas, they are more than capable of cutting projects that are not profitable while keeping ones that are.

No you can't. (0)

Anonymous Coward | more than 2 years ago | (#39577629)

Sorry, but sooner or later you have to start making a product or providing a service that people actually want to buy.

Re:No you can't. (0)

wzzzzrd (886091) | more than 2 years ago | (#39578599)

Sorry, but sooner or later you have to start making a product or providing a service that people actually want to buy.

That's 80s Wallstreet bullshit. There are no such things as products, services or money. It's all about grabbing the most of what you fancy (which in most cases is money). No selling or buying involved. Think consultants.

Re:Typical large corporations (2, Insightful)

doston (2372830) | more than 2 years ago | (#39576669)

I'm a capitalist, but not a 1 percenter, and I say that you can't cut your way to profitability.

How does that affect your prediction?

Free market fantasies. You're a capitalist, eh? Too bad it doesn't really exist....anywhere. I hope you don't think anything that's gone on in banking, the oil industry, agriculture, uh...do i need to go on, has anything to do with a capitalist 'free market'. Has a lot more to do with fleecing the tax payer and handing the cash over to companies, who then pretend to be engaging in some kind of free market. What a bunch of bull.

Re:Typical large corporations (1)

gestalt_n_pepper (991155) | more than 2 years ago | (#39576899)

There's the free market (Somalia) and the fair market (e.g. USA before Glass-Steagel was cut and anti-trust laws were still enforced), but you can't have both.

Re:Typical large corporations (1)

doston (2372830) | more than 2 years ago | (#39577271)

There's the free market (Somalia) and the fair market (e.g. USA before Glass-Steagel was cut and anti-trust laws were still enforced), but you can't have both.

I don't want either. I want something else and to stop pretending this shit works/exists. Anarcho-syndicalism maybe?

Re:Typical large corporations (1)

gestalt_n_pepper (991155) | more than 2 years ago | (#39577517)

Anarcho-synicalist *collective* ThankYouVeryMuch.

What works is moderate non-extremism and sensible, reality-based pragmatism. Some rules and regulations. Not too many. Some taxes, but not too much. Legal principles as guidelines, not as sacred writ (e.g. the constitution), ongoing, reasonable cost-benefit analyses for every government program or law.

Non-inflammatory, detail-intensive, labor-intensive, kind of boring stuff that makes government work like it does in Finland, Denmark, Sweden and so on.

In other words, a government as ongoing hard work.

Re:Typical large corporations (1)

Genda (560240) | more than 2 years ago | (#39579125)

OH MY GAWD!!! Your going to sit there with a straight face and suggest sanity!!! What about Religious Zealots! What about Left leaning wingnuts and the others on the Right? What about the folks who demand services but howl when it comes time to pay taxes (both rich and poor.) Sanity, huh? Don't get me wrong, I've been preaching sanity for long time. Its just a real bitch to sell in a political climate whose middle ground seems to have been reduced to handful of white collar workers in Chicago ;-)

Re:Typical large corporations (0)

Anonymous Coward | more than 2 years ago | (#39577745)

Its seems that the west is cutting jobs while the east is employing people in larger numbers in manufacturing (remember manufacturing, where you MAKE stuff ???) and tech design.
We're turning into exactly the useless group of people in Hitchhikers Guide To The Galaxy, cast off onto a distant planet - a bunch of lawyers, politicians, consultants, managers, salesmen and hairdressers - with apologies to hairdressers since they're actually doing something unlike the others in that list!

While Y! might have to - you can't employ people if there's no money - its a global question of what the west will be doing 20 years from now - we probably won't even grow our own food, or make a single thing. For a couple of decades now people have said that the solution is that we will be the smarts of the world - providing the know-how that the rest of the world can't do......but they forgot that that gap can be bridged by industrious nations, as we're now seeing with China. Anyone for a hairdressing course ?

Re:Typical large corporations (1)

Genda (560240) | more than 2 years ago | (#39579147)

That's phone sanitizer to you Sir!

Re:Typical large corporations (1)

drooling-dog (189103) | more than 2 years ago | (#39578679)

Monopoly capitalism is still capitalism. Competition and free markets are part of the ideological face that it presents to the public, but no capitalist worth his/her salt wants to be out there competing to sell commodity goods for any longer than they have to.

Re:Typical large corporations (1)

Genda (560240) | more than 2 years ago | (#39579257)

No Monopoly Capitalism is Capitalism in collapse. When you need widgets to stay alive, and the only widgets you get are my widgets, there is no competition, there are no market pressures. I can sell them for any prices I want up to the point where I start killing off a significant percentage of my client base (I'd have to do a profit and loss analysis to find the optimal price.) Even Adam Smith warned about the concentration of wealth and power and the pitfalls of monopoly in a functioning capitalistic environment. He said that this system only works with a robust and financially affluent middle class. Monopolies tend to cannibalize their societies.

Re:Typical large corporations (1)

Sir_Sri (199544) | more than 2 years ago | (#39577365)

Depends what you're spending money on.

There are two main places you can cut and have that move you to profitability. First, is business areas that just aren't making you money, and don't appear to be likely to make you any money any time soon. For a long time Microsofts Xbox division was an example of this. They were playing a long game, hoping it would eventually start making them money. That's fine when you have positive cashflow from somewhere else to invest, but not a good plan when you are running out of money. Googles android is another example of something that they're pouring money into but isn't (or at least wasn't) making them cash. Some of these things evolve out of a changing market place too. I'm sure Yahoo's travel service at one point was top notch and a money maker, nowdays, I don't even know if it still exists.

Secondly are'unnanounced or not yet finished products. Things which are in development costing money. This can be cutting off your nose to spite your face, but it can also be eliminating dead weight. Projects that are massively over budget, underperforming or just don't seem to fit with your new product strategy. For example yahoo has a social service to compete with Twitter, called Yahoo Meme. Guess how good a plan that is?

And, I suppose the other way is a more one at a time thing. Every outfit has some employees who are just drains on productivity, they either spend all day posting on /. and not working or are disruptive to fellow employees. If you lay them off in batches you can claim it is for 'lack of work' rather than gross incompetence or just being a douche, and you don't need to go through a lawsuit.

Re:Typical large corporations (0)

Anonymous Coward | more than 2 years ago | (#39578683)

Blanket statements like "You can't cut your way to profitability" sound nice, but are largely meaningless.

I DO find it interesting though that that's the exact statement I heard in a news article about the job cuts. So basically you're just parroting what the media is repeating. You're not a capitalist, you're an echo chamber.

Re:Typical large corporations (0)

Anonymous Coward | more than 2 years ago | (#39576305)

And I am curious how large his golden parachute is.

Whats the CEO care, he gets paid no matter what, he has no real motivation to not fire them.

My Kif sigh. (5, Insightful)

Anonymous Coward | more than 2 years ago | (#39576247)

Daniel Loeb, the hedge fund manager who is also one of Yahoo's largest shareholders, has launched a new campaign to shake up Yahoo's board even further since being spurned by the company. Loeb has been trying to persuade Yahoo to elect him, as well as three other alternative candidates, as possible directors. If a truce isn't met between Loeb and Thompson, the dispute will be put to a shareholder vote at Yahoo's annual meeting.

So, this "hedge fund" guy (we called them corporate raiders back in my day. They wore an onion on their belt because that was the stye back then ... oh, yeah.) is going to can a shit load of people, reducing the expenses and boosting profits in the short term. Said "hedge fund" guy will then make a killing on his stock, options, and any warrant positions he has and flies back in his corporate jet to the bank.

In the meantime, Yahoo! not having people to actually, I don't know innovate and restructure the company to actually offer unique products will be gone. So, in the long term, Yahoo! will just be an email outsourcer for the likes of AT&T - a nice low margin commodity market.

Yep, if I were Yang et. al., I'd be unloading as fast as I can and spend the rest of my life being a philanthropist.

Nothing good of this will come of it. It never has and never will. "Hedge fund" guys know only one thing: slash and burn.

Re:My Kif sigh. (2)

DerekLyons (302214) | more than 2 years ago | (#39576357)

So, in the long term, Yahoo! will just be an email outsourcer for the likes of AT&T - a nice low margin commodity market.

And what, exactly, is wrong with that? (Aside from no longer being a source of nerd porn.)

Re:My Kif sigh. (3, Insightful)

Genda (560240) | more than 2 years ago | (#39576831)

I dunno, turning a potentially thriving company with an illustrious history into an internet toxic waste dump while spacing 10,000 workers in a poor economy seems kind of FSCKed to me.

The only problem Yahoo has is leadership and vision. You aren't going to out Facebook Facebook or out Google Google. You need to look at the big picture, notice the human trends and come up with a selection of related new services, that others haven't seen yet. There are two dozen startups doing uber-cool things with customer information. If Yahoo had picked a couple of those up, and streamlines its offerings to unique high values services, they'd be cake walking to the bank today. Of course if it that easy, everyone would be doing it. You need to find the right geek with business acumen to carve out some new business spaces.

Re:My Kif sigh. (0)

Anonymous Coward | more than 2 years ago | (#39577205)

You aren't going to out Facebook Facebook or out Google Google.

I dunno, Google did a pretty good job of out Yahooing Yahoo (Free email, websearch, and a news aggregator? Wow!!!)

The rest of what you said seems pretty valid though.

Re:My Kif sigh. (1)

Sir_Sri (199544) | more than 2 years ago | (#39577403)

They seem to be trying, and not sure who's vision of the future is the right one. Which I suppose is always the challenge.

In their defence, they do kind of have this strategy outside the US, where they bought some services overseas and have made them into something over there. In the US they might have stuck their thumbs up their arses for a while waiting to see if MS could acquire them.

Re:My Kif sigh. (1)

Kjella (173770) | more than 2 years ago | (#39578961)

You aren't going to out Facebook Facebook or out Google Google.

No, but Facebook beat a lot of other competing social networks and Google beat a lot of other search engines. In retrospect it's easy but it was not at all obvious that Facebook would ever become anything more than a glorified student directory. And Google pretty much out-Yahooed Yahoo among others, they hit them dead center with better search algorithms - exactly the thing you claim they can't do. There's no one good answer to this, sometimes you can take them on head on and then you should. Sometimes you should dodge and find yourself a niche. Sometimes you should leap and go find something else (Apple comes to mind, Macs is still a niche computer). The right answer is "Pick the battles you can win." and the $100 billion dollar question "Well, how do I do that?"

Re:My Kif sigh. (0)

Anonymous Coward | more than 2 years ago | (#39576515)

What's wrong with using this as an excuse to cut those "hiring mistakes" every organization has?

Re:My Kif sigh. (0)

Anonymous Coward | more than 2 years ago | (#39576555)

Investors, even large ones, can seldom save a stock. Yahoo! has been misguided and mismanaged for over a decade. I sold my Yahoo! stock for a slight loss years ago. So glad I did.

Yahoo! is regrettably beyond saving.

Wrong question (4, Insightful)

tacokill (531275) | more than 2 years ago | (#39576665)

You write a good post. But you aim at the wrong subject. You should ask yourself: Why does Yahoo find themselves in this position in the first place? (hint: it has something to do with not giving customers what they want)

Strong companies don't have these problems with "hedge fund" guys. Weak ones do. Like nature, american enterprise and the markets can be very cruel. It seems odd to me that you complain when things work the way they are supposed to work. What did you think was supposed to happen when you don't give customers what they want? (ie: you are not successful in the marketplace - for whatever reason).

Re:Wrong question (1)

black6host (469985) | more than 2 years ago | (#39576965)

Strong companies don't have these problems with "hedge fund" guys. Weak ones do. Like nature, american enterprise and the markets can be very cruel.

"Like nature", very apropos. The vultures don't fly and circle around healthy animals. They wait until either the object of their desire is dead, or so close to that point that there is no risk other than their peers trying to get their share. Personally, I think a hedge fund manager cage match could possibly be quite entertaining :) I suppose the winner would be the one with the "fan of death" made of SCO $699 linux license certificates.

Re:Wrong question (0)

Anonymous Coward | more than 2 years ago | (#39578201)

Looks like Yahoo! has been profitable all but one quarter in the last 10 years (some web site [ycharts.com] ). Do you actually believe board politics reflects the market, or is that just a knee-jerk reaction to someone saying something that sounds liberal to you?

(I know profitability and net income aren't the whole story, of course, but maybe you could make an evidence-based point about how, in this particular case, the GP is wrong about the short-sightedness of this decision? Because there seems to be some evidence that short-sightedness is hurting American businesses, and it is the natural outcome of a market slanted towards quarter-to-quarter returns over long-term returns.)

Re:Wrong question (5, Interesting)

rgbrenner (317308) | more than 2 years ago | (#39578493)

Normally you would be right.. but Yahoo isn't a weak company. It just hasn't kept up with Google.

http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics [yahoo.com]

5 billion in revenue
1 billion in net income
2 billion in cash (1.3 billion in operating cash flow)
no debt

They have a problem with falling revenues, and as a result, falling profits. Their profits declined 5.3% yoy -- so instead of 1.10 billion, they only made 1.05 billion.

Yahoo has the resources to build their company.. they just don't have a vision. And this guy... he doesn't have a vision either.

He is slashing and burning... he is not going to lead Yahoo anywhere.. he's just destroying the company further.

Re:Wrong question (1, Informative)

slew (2918) | more than 2 years ago | (#39578811)

You write a good post. But you aim at the wrong subject. You should ask yourself: Why does Yahoo find themselves in this position in the first place? (hint: it has something to do with not giving customers what they want)

It depends on who your customer is. Yahoo has been pretty good at giving end users what they want. Google has been pretty good at giving people with advertising dollars to spend what they want. Unfortunatly, one of these types of customers pay much better than the other (given that the content is "free").

Strong companies don't have these problems with "hedge fund" guys. Weak ones do. Like nature, american enterprise and the markets can be very cruel. It seems odd to me that you complain when things work the way they are supposed to work. What did you think was supposed to happen when you don't give customers what they want? (ie: you are not successful in the marketplace - for whatever reason).

If you define companies w/ high valuation and/or preferred voting share structure as "strong", I agree with you. However in a company with a more equitable share structure, if a so called "hedge fund" guy thinks that some large company assests aren't being used as profitably as they think they can be managed (they smell a short term untapped business opportunity), they often buy a bunch of shares (buy low) and try to force their way on the board to implement their idea. Of course this manuver isn't very easy in a company with a share structure that doesn't allow them to easily force their way on the board to implement their plan.

In this situation, Yahoo, has some large assets (Alibaba, large user base), and no doubt some hedge fund has some idea that they can (in the short term) take advantage of these assets better than the current board or management for quick profit. Yahoo share price is low and the structure allows for the hedge company to do this. As a non-tech example, a hedge fund once tried to get McDonalds to spin off their corporately owned restaurants into a separate company using this strategy. Might have been a good idea in the short term, but might not be in McD's long term interest. I don't think McD's is a "weak" company.

Re:My Kif sigh. (0)

Anonymous Coward | more than 2 years ago | (#39576671)

You're probably right. But let's be clear about something... nobody listens to the Carl Icahn types when the existing leadership clearly knows what they're doing.

It's not like Yahoo is pushing to innovate, creating new, fantastic, profitable technologies for the web while some jackass in the back of the room screams, "we can make more profit tomorrow if we rape the company!"

Yahoo is in its death throes, so everyone with money on the line is willing to hear all options. And anyone with a stake should listen carefully, because parting the jalopy out... that just might be the only way to salvage any value left in the place.

Re:My Kif sigh. (4, Interesting)

LittleBigScript (618162) | more than 2 years ago | (#39576705)

At least they are getting a severance. When I got laid off from Nortel, they went into Chapter 11 just so Pavi Binning didn't have to give out no stinkin' severance.

Re:My Kif sigh. (0)

Anonymous Coward | more than 2 years ago | (#39576715)

You don't know what a hedge fund is, do you? Hint: It's not the same as a private equity fund.

Re:My Kif sigh. (2, Interesting)

Anonymous Coward | more than 2 years ago | (#39576773)

I'm not a fan of the raid1ers; but did it occur to anybody that there's not that much need to innovate at Yahoo?

As a long-timer user of the service, it reached that point a while ago. Many of the changes they've made have not been for the better. It's all the trendy "let's add AJAX to this page" crap that just slows it down in the older browsers which is... hello!!! A large part of their customer base. Geezers like me.

These companies need to learn how not to break what don't need fixin'. I'm thinking of the Finance pages in particular. The GNUplot charts were some of the best out there. The interactive charts had marginal utility at best, and dumbed things down at their worst. In the back of their mind they know this, which is why they had to retain a lot of their "classic" features.

I would submit that a full-blown spinout of the legacy customer base, with a "Chinese wall" between the departments would be a better solution. The kids who want AJAXy mobile "app" layouts can be the mainline Yahoo, or the new Yahoo; but for cryin' out loud don't mix the two.

Yes, the legacy base will get smaller over time; but do you have any idea how many struggling startups would KILL to have half the customer base of the dying legacy section?

Yeah, I know what you're thinking Mr. CXO. You can force the legacy customers to "upgrade". No you can't. Listen to me and get it through you're necktie addled brain--when you pull changes on us and we don't want them, it doesn't become "whoah is me, I can't do anything". Instead it becomes, "well, I'm back to square 1. Let's see what else is out there". Guess what? There's a lot out there.

Re:My Kif sigh. (4, Interesting)

undeadbill (2490070) | more than 2 years ago | (#39577113)

I was living and working in the Bay Area back in 1991. Yahoo! was primarily a massive indexing operation then, the largest employer of library sciences majors outside of the CIA, and employed several friends of mine. Historically, they have always laid off large groups of staff, and then hired new staff to replace them under different titles, thereby skirting state employment law. I've pretty much been able to time their layoffs, because their recruiters have my number, and they start doing interviews in advance of the firings, like clockwork. Well, up until I told them in several rude ways to stop calling me.

Nobody who wants a long term job works for Yahoo. I'd say the current round of layoffs is just that, the current round. Continuously firing their performing (ie, highest wage earning) staff would also explain why they have done nothing notable since, oh, the early 90s. Everything they have done was simply to keep up with the Joneses. Web space didn't happen until geocities and angelfire became popular, and after their own failed attempts Yahoo then just bought Geo. Mail wasn't added until HotMail took off. Automating directory services didn't happen until Google. I could go on- but they have always been an overhyped dog of a stock, slow to adapt, and their lugubrious descent into failure hasn't surprised me in the least.

The clincher for me was when they were considered the "gold standard", and their shares were over at over $450 per. This was when they were still doing indexing with librarians. Once I saw that, I quickly changed my skillset to survive the coming dot-bomb and socked away my cash.

Re:My Kif sigh. (4, Insightful)

bipbop (1144919) | more than 2 years ago | (#39578503)

I was living and working in the Bay Area back in 1991. Yahoo! was primarily a massive indexing operation then

They didn't exist for several years after 1991.

the largest employer of library sciences majors outside of the CIA, and employed several friends of mine.

And add a few more years here. Are you thinking around 1998?

Historically, they have always laid off large groups of staff

No. When Yahoo! was on the way up, no one left, willingly or unwillingly. Their first layoff was in 2001. Since I was working there, I remember :-)

and then hired new staff to replace them under different titles, thereby skirting state employment law.

Now you're just making stuff up. Yahoo's not a good company, but they never "historically [..] always" did this. If they do this now, it's a new practice within the last half a decade (since I left).

Re:My Kif sigh. (2)

undeadbill (2490070) | more than 2 years ago | (#39578733)

It was '98. I'm getting old, and thinking in internet years. ;)

Re:My Kif sigh. (4, Insightful)

tgd (2822) | more than 2 years ago | (#39577457)

Nothing good of this will come of it. It never has and never will. "Hedge fund" guys know only one thing: slash and burn.

And that may be the right thing to do at this point. The marker is moving -- very quickly. The pace at which it is increasing its speed is also increasing.

A company the size of Yahoo can't spend the money it needs to in order to really innovate years out, and not months out, once it gets behind the curve. They've got 17 years of legacy crap they need to continue supporting if they want to remain "Yahoo". Seventeen years worth of cruft, acquired services and the ilk. If they can't break even on those, they need to do MASSIVE restructuring to eliminate legacy support debt to even have a prayer of coming up with something new and delivering it before the market leaves that behind, too.

Microsoft can keep innovating because they've got massively profitable products and services around the majority of the support debt. Apple got where it was because it had basically failed when Jobs started to turn it around. (It'll be interesting to see if they can continue to innovate as they end up with a half billion people they need to keep happy... I own a lot of Apple stock, and I have to say that Cook's tenure so far has me pretty nervous from that standpoint!)

Yahoo, though? The scenario you described may be in the best short and long term interest of both the employees and the stockholders. The 2000 people laid off are 2000 people getting severance while there is money to be had, and have the opportunity to get into a company that has a better chance. And if they trim it enough, shed enough services, get the company lean enough that it can invest in real future-looking research, maybe some of the employees left will be able to weather that storm.

Its short sighed to assume that you can wish a company into success, and sometimes the safer bet is to be honest about where you are and where you can get from there.

sad (2, Insightful)

s1d3track3D (1504503) | more than 2 years ago | (#39576259)

this is sad, at one time Yahoo was the king, then they lost their direction, didn't read the changing times correctly, made some very bad decisions, got too big and lost focus, luckily we have google now, i'm sure they wont make the same mistakes (cough,...)

Re:sad (1)

PCM2 (4486) | more than 2 years ago | (#39576907)

The way I remember it, Yahoo was "the king" in maybe ... 1998?

Re:sad (2)

eln (21727) | more than 2 years ago | (#39577247)

Yes, and then Google came along and Yahoo consistently failed to do anything to effectively meet that threat, despite plenty of opportunity to do so. Google was not always the massive behemoth it is today...had Yahoo been smarter, it could have easily pushed Google aside and remained the dominant search/portal company, but instead if took misstep after misstep until it became an afterthought.

so let me get this right (3, Insightful)

nimbius (983462) | more than 2 years ago | (#39576331)

Yahoo sells off its search engine technology to microsoft to use in Bing, then fires 14% of the company in the pursuit of "pivoting its focus in a new direction."

your entire company was based on searching for shit on the internet; that was your expertise for more than a decade. Sure you have other products like email that are basically indistinguishable from competitors, but you havent hired anyone to replace these workers that would give the public an indication of your intents to focus or pivot on anything but firing more workers and parachuting more execs. at this point the only place left to "pivot" is chapter 11 bankruptcy.

Re:so let me get this right (-1)

Anonymous Coward | more than 2 years ago | (#39576513)

Good people go to bed earlier? Your a moron; go look up the second sleep, and tell me the entire human race is "no good". Shove your victorian morals up your ass, Sir.

job offer (0)

Anonymous Coward | more than 2 years ago | (#39576353)

I got a call this morning from a head hunter representing them. I asked about this layoff. He denied it. I turned down the offer.

Re:job offer (1)

slew (2918) | more than 2 years ago | (#39578055)

I got a call this morning from a head hunter representing them. I asked about this layoff. He denied it. I turned down the offer.

FYI: Head hunters don't offer jobs, they merely refer you to a company that may or may not give you a job offer (which undoubtely has to get approved by HR).
Just because a head hunter claims that their is a job for you doesn't mean that: 1. There is a job, or 2. The company will offer you the job if there is one.

No doubt there is one of several things going on here:
1. The head hunter saw a stale job listing at Yahoo and cold called you up about it hoping to score some commission.
2. You are making this whole thing up.

They can't do that! (4, Funny)

emag (4640) | more than 2 years ago | (#39576393)

They can't do that, it's supposed to be *my* Yahoo! and I didn't give permission...

Re:They can't do that! (1)

Hillgiant (916436) | more than 2 years ago | (#39577865)

*Somebody* needs to take a closer look at his ToS.

Re:My (1)

TaoPhoenix (980487) | more than 2 years ago | (#39578515)

You might have been whooshed.

There was this craze a while back (not sure who it started with) to label everything "My ___". My Documents in Windows, MySpace, My____

So of course Yahoo followed suit with a My Yahoo section. http://my.yahoo.com/ [yahoo.com]

translation (1)

Anonymous Coward | more than 2 years ago | (#39576409)

Over the last 60 days, we've fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed.

"The guys from McKinsey swarmed through here and gave me three options. Had I picked one of the other two, you'd have liked that even less."

thank you, glorious leader (0)

Anonymous Coward | more than 2 years ago | (#39576495)

Go fall on your sword

Last! One! Out! Please! Turn! Off! The! Lights! (2, Funny)

xxxJonBoyxxx (565205) | more than 2 years ago | (#39576501)

Last! One! Out! Please! Turn! Off! The! Lights!

Re:Last! One! Out! Please! Turn! Off! The! Lights! (0)

Anonymous Coward | more than 2 years ago | (#39577929)

yes.

but at HQ a year or so ago, they replaced their interior office lights with horrible "energy saving" lights - they didn't put out enough light and that which they did was a horrible depressing bluish color. just driving by at night, it was depressing to look at, let alone work in. although, the place was so depressing for other reasons, most people probably didn't care much. of course, last i noticed, the building with the execs still had the nice bright "warm" lights - but then i've not driven by in a while - maybe even the execs have now been cast into depressing blue light (which might explain a lot!).

so, maybe no need to turn the lights off, they aren't using much energy.

of course they could have built the damned building with energy efficient glass instead of using glass that transmitted heat so effectively. on cold winter days, near the windows there was a noticeable draft caused by the cold air (which had started as warm air at the top of the windows before being cooled so efficiently) cascading from the bottom of the windows. in the summer the inverse happened, although it wasn't as obvious because the draft was not focused at "people level". but no, that would have required long term thinking back about ten years ago when the built the buildings - that would have been asking too much of yahoo!

CEOs (4, Insightful)

HeckRuler (1369601) | more than 2 years ago | (#39576561)

Just out of curiosity, how much money did these CEOs take on their way out?

I mean, they got paid for doing a job of course. And even if they do a bad job of it, they (arguably) deserve a paycheck. But bonuses, severance pay, and perks are hard to justify when letting people go because the business if failing.
Stock options are actually a pretty good idea. If they drive the company into the ground, those aren't worth much.

With the rising costs [google.com] of "quality" CEO material, were these guys worth the investment?

Re:CEOs (2)

crazyjj (2598719) | more than 2 years ago | (#39576673)

If Jerry Yang walked away with more than $1 it was too much.

Re:CEOs (0)

Anonymous Coward | more than 2 years ago | (#39576775)

Put it this way, none of them will ever even comprehend the concept of estimating how long they can live on what canned goods they can take after they've been forcibly evicted from an apartment.

Perhaps they could have saved money.... (0)

Anonymous Coward | more than 2 years ago | (#39576563)

By not trying to sue people for 'patent infringement'. Lawsuits are expensive.

YaWho? YaWhere? (2)

swschrad (312009) | more than 2 years ago | (#39576591)

YaLost, YaDown, YaGone. coasting too long is fatal to a dotcom.

really? (0)

Anonymous Coward | more than 2 years ago | (#39576639)

WGAFFA yahoo?

Y'know .... (1)

Kittenman (971447) | more than 2 years ago | (#39576717)

... it's odd how a company doesn't look at what it is and what it has rather than look at where it wants to be. Some of these companies go through a lot of change, and come out the other side as a totally different company from where they started (if they come out at all).

Imagine a drafting company that has 50 drafting employees. The CEO decides they want to be an IT company. They can either
a) Lay off the 50 drafting employees and hire 50 IT people, or
b) Not do that, and keep going as a drafting company

I was shocked (0)

Anonymous Coward | more than 2 years ago | (#39576719)

as I didn't know there were still 2000 people employed at Yahoo.

We need new laws governing layoffs (5, Interesting)

Anonymous Coward | more than 2 years ago | (#39576813)

We need a new law governing layoffs.

If layoffs are about restructuring a company so it can better respond to the market and so it can be profitable, we need some new conditions to ensure that not only are layoffs necessary, but that they're structured to effect long term growth and stability.

In the event of a layoff:
1) executive pay increases are frozen and executive pay is limited to no more than three times the median company salary (excluding executive pay).
2) stock grants to executives are suspended for a period of one year following the layoff.
3) stock vesting is suspended for two years following the layoff.
4) executive bonuses are suspended for a period of two years following the layoff.
5) any new layoff resets the clock.

This way executive compensation is disconnected from any short-term gains or profits realized from a slash and burn strategy. If they want to reap big rewards they have to manage the long term growth of the company.

but I know that's just a pipe dream. no law will ever be passed and you know they're not going to vote this on themselves.

Re:We need new laws governing layoffs (-1)

Anonymous Coward | more than 2 years ago | (#39577067)

From your post, it's clear you don't know anything about management, investing, or corporate governance. I can immediately find 50 things that make your proposed changes non-starters, but let's just pick one:

3) stock vesting is suspended for two years following the layoff.

Suppose this 2,000-person layoff results in break-even 6 months after the layoff, then major profits (and handsome stock returns) 18 months after the layoff, followed by a period of hiring and growth and/or other factors external to the business that result in minor profits for the next three years and the stock returns to its previous low levels. Despite the fact that the CEO's play performed admirably, both for the company and for shareholders, the CEO would be unable to reap the rewards of that decision due to your rule #3, above.

I agree that corporate governance should be a lot better, and CEO pay should be tied to long-term investing objectives instead of short-term profits, but the changes you propose above don't accomplish that at all.

Re:We need new laws governing layoffs (4, Insightful)

HeckRuler (1369601) | more than 2 years ago | (#39577827)

other factors external to the business that result in minor profits for the next three years and the stock returns to its previous low levels

When Rome is burning, it's externalities. When it's growing, it's entirely due to the CEO's guidance. If, after two years, the stock has returned to it's previous state, then the CEO's amazing work wasn't all that amazing.
If they complain about it not being fair, the response is the same as the one they gave during the bust years.
"Well there are externalities"

This wasn't the best example for you to pick, please try again.

only in the software industry... (5, Insightful)

MarcoAtWork (28889) | more than 2 years ago | (#39576849)

... laying off people allows you to "get stuff done" and "be nimble". To me a company with excess workforce is a lot more likely to be nimble (easy to create ad-hoc teams to pursue new products/things) than a company at capacity where everybody is already fully tasked (where if you have a new project you HAVE to abandon some older project whether or not it makes sense to do so).

The nimbleness of a company is more of a function of how it's managed than of its size, but of course it's a lot easier to spin layoffs by pretending that a smaller company is somehow better performing than a larger one (if that was the case why would companies ever hire? it'd be much simpler to just remain "nimble" by staying small).

Re:only in the software industry... (2)

frosty_tsm (933163) | more than 2 years ago | (#39577035)

... laying off people allows you to "get stuff done" and "be nimble". To me a company with excess workforce is a lot more likely to be nimble (easy to create ad-hoc teams to pursue new products/things) than a company at capacity where everybody is already fully tasked (where if you have a new project you HAVE to abandon some older project whether or not it makes sense to do so).

The nimbleness of a company is more of a function of how it's managed than of its size, but of course it's a lot easier to spin layoffs by pretending that a smaller company is somehow better performing than a larger one (if that was the case why would companies ever hire? it'd be much simpler to just remain "nimble" by staying small).

Excess workforce can lead to:

  • Extra barriers to getting stuff one such as more bureaucracy or empire building
  • Money being spent on employees who skill set doesn't match what you need (which is extremely common in the software industry), which leads to...
  • Lack of money available to spend on new business direction, employees (with the right skill set), training (for existing employees), contractors, capital (e.g. servers), acquisitions, or advertising

Re:only in the software industry... (1)

MarcoAtWork (28889) | more than 2 years ago | (#39577189)

those look like "bad management" to me rather than intrinsic issues with excess workforce...

Re:only in the software industry... (0)

tgd (2822) | more than 2 years ago | (#39577539)

... laying off people allows you to "get stuff done" and "be nimble". To me a company with excess workforce is a lot more likely to be nimble (easy to create ad-hoc teams to pursue new products/things) than a company at capacity where everybody is already fully tasked (where if you have a new project you HAVE to abandon some older project whether or not it makes sense to do so).

The nimbleness of a company is more of a function of how it's managed than of its size, but of course it's a lot easier to spin layoffs by pretending that a smaller company is somehow better performing than a larger one (if that was the case why would companies ever hire? it'd be much simpler to just remain "nimble" by staying small).

That may be the view if you've spent most of your time in software and are looking at the rest of the markets with rose colored glasses, but corporate bloat, political fiefdoms and massive human resource structure are not an invention of software companies. There's hundreds of years of business experience behind the decisions people make like that. You shouldn't assume they're morons or don't understand business just because you don't or you believe you can intuit your way to a greater understanding.

Re:only in the software industry... (0)

Anonymous Coward | more than 2 years ago | (#39578115)

Only in the software industry? They just took a page out of the pharmaceuticals playbook. Nothing but full scale slaughter been going there for nearly ten years.

Re:only in the software industry... (1)

LordLucless (582312) | more than 2 years ago | (#39579667)

The nimbleness of a company is more of a function of how it's managed than of its size, but of course it's a lot easier to spin layoffs by pretending that a smaller company is somehow better performing than a larger one (if that was the case why would companies ever hire? it'd be much simpler to just remain "nimble" by staying small).

Small companies are generally more nimble.

Small companies are usually new companies - or ones that have experienced only minimal growth since their founding. As a company gets bigger, the ratio of manager:workers increases. New companies and start-ups have a very low manager:worker ratio. They're "lean" and "nimble". As they expand, the manager:worker ratio goes up, and they become less nimble, because although the total workforce has increased, the actual hands-to-the-plow segment of that force hasn't. In addition, you start getting turf wars, and chinese whispers going on, as everything needs to be filtered through multiple layers of management.

Big companies see this, and decides that small companies are nimble because they are small. They therefore fire more of their workers, further increasing their manager:worker ratio, and descending very quickly into the spiral of bankruptcy.

Poor choice of word? (1)

Reasonable Facsimile (2478544) | more than 2 years ago | (#39577073)

Now, I completely understand why the CEO would call his workers "yahoos," but did anyone else find it a bit offensive (or perhaps, ironic)?

http://www.thefreedictionary.com/yahoo [thefreedictionary.com]

coincidence? (1)

Eponymous Hero (2090636) | more than 2 years ago | (#39577145)

April 3rd: Facebook countersues Yahoo over 10 disputed patents

April 4th: Yahoo lays off 2,000 people.

And yahoo's core business is??? (0)

Anonymous Coward | more than 2 years ago | (#39577215)

"Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business,"

What is yahoo's core business? Do they have one?

Wait a second... (2)

LeadSongDog (1120683) | more than 2 years ago | (#39577483)

...if Yahoo had employees, why could I never get a human answer to an email?

A New Direction (1)

sl4shd0rk (755837) | more than 2 years ago | (#39577563)

What they mean is; instead of swirling around the bowl at an agonizingly slow pace, they are wanting to pack as much cash into their pockets as they can and shoot straight for the drain.

Need work, Yahoo is hiring! (1)

Y2K is bogus (7647) | more than 2 years ago | (#39577567)

Why is it that Yahoo has job listings on Craigslist? Surely some of those 2,000 had the skills to fill those positions?!

Re:Need work, Yahoo is hiring! (1)

Tynin (634655) | more than 2 years ago | (#39578039)

In my experience, it is because they have to satisfy some legal(?) requirement of posting the jobs in the open, even if they already know who they are going to hire, or in this case move. Or perhaps fire and then rehire in order to reset seniority/vacation time/possibly even pay.

Re:Need work, Yahoo is hiring! (0)

Anonymous Coward | more than 2 years ago | (#39578559)

In my experience, it is because they have to satisfy some legal(?) requirement of posting the jobs in the open, even if they already know who they are going to hire, or in this case move. Or perhaps fire and then rehire in order to reset seniority/vacation time/possibly even pay.

no, it's a very large company. some parts have open positions at the same time that other parts are being downsized. typical for any large company to do that.

Re:Need work, Yahoo is hiring! (0)

Anonymous Coward | more than 2 years ago | (#39578227)

Employees being let go *are* encouraged to apply internally for other positions they might be appropriate for. Yahoo is pretty good about not just giving people the finger on their way out the door. Layoffs suck, but I've seen a *lot* worse from companies with how they treat employees during a layoff.

Jack (1)

Anonymous Coward | more than 2 years ago | (#39578229)

Jack be nimble
Jack be quick
Jack got laid off by a hedgefund manager dick.

Darl McBride strategy (0)

Anonymous Coward | more than 2 years ago | (#39578407)

GO TEAM SUE!

Laid off employees should sue... (0)

Anonymous Coward | more than 2 years ago | (#39578473)

...because the company was stupid for not taking microsoft's money ;)

Revert 2 Yahoo! Classic Classic & dtich Micros (0)

Anonymous Coward | more than 2 years ago | (#39578563)

They need to kill the Microsoft investors. It isn't wise to have evil people/companies involved in your operations. They made a stupid mistake of letting Microsoft get involved in the company in any way, shape, or form. They should not have partnered up with Microsoft on search. STUPID STUPID STUPID. They also shouldn't have clustered the Yahoo! main page. When were using Google as the back end and had a less clustered non-2.0 interface things were good and no Microsoft investments/partnerships.

Now? They have people by the balls who are slowing moving away... the companies products suck. They abandoned products that were actually useful (they had one of the only services which let you upload and print pictures en mass from GNU/Linux at one time... now you can do this with everybody but not then... they killed this service).

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