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Yahoo Set For More Layoffs

April 5, 2012

Marshal Rosenthal for RedOrbit.com

Pity the poor Yahoo press officer. It seems that each time Yahoo stubs its toe the world seems to be watching. What´s the latest to befall the once-mighty Search engine giant? More layoffs.

According to an RTTNews report, those thinking that Yahoo would be cutting back on staff seem to have called it right. The company´s announcement that around 14% of their global workforce [some 2,000 folks] vindicates that position.

The rest of Yahoo´s commentary follows along the usual lines of 1) We hate to do this but… and 2) Now we can focus on our core businesses and those areas that are the main priorities.

Boiled down to basics, it means that Yahoo needs to find ways to be more competitive in comparison to its competition – you know who. Not to mention social networking websites that are all the rage now. And since Yahoo makes its money primary though ad revenues, no department would seem immune to the chopping block.

If this all sounds too familiar, that´s because it´s not the first time that Yahoo has had to take an axe to their staff. Or that it´s been done in a way that hardly seems to endear itself as being a successful company just “pruning” a bit.  Those with good memories — or access to a Search engine — will recall the firing of the company´s Chairman of the Board Carol Bartz in 2011. Over the phone. Not a very nice way to go about it, for sure. Or classy. Or resulting in any kind of good PR all around.

Which is part of Yahoo´s problem — that their layoffs just point to how much trouble the company is always in. It´s about perception.

Those needing more to agree to this conclusion don´t need to stop at a single person — how about a quick peek at the past? Go back to December of 2010. As was the case now, it was the case then — purported layoffs by Yahoo were coming. And come they did: about 4% [some 600 folks] were axed. This time it was the Yahoo Products Group. Some of the commentary from the company sounds eerily familiar when you hear it now: “Today’s personnel changes are part of our ongoing strategy to best position Yahoo For revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace.” — so said a company spokesperson.

Looking even farther back brings us to Microsoft´s ultimately failed bid to buy Yahoo that happened back in 2008. We all know how that played out — it didn´t, and many considered the actions of then CEO Jerry Wang to be irresponsible. Considering that Yahoo wasn´t exactly doing well at the time — there were layoffs that had occurred (remember those?) and the 2008 forecast for the company was not encouraging. Microsoft and Yahoo danced around for quite a while, but the results were the same as if they had never even been in discussions. Both companies went off to do what they do best — although it is now pretty evident that Yahoo has little to point back to with pride between now and then.

Returning to the present, it´s only fair to say that each layoff is seen less as a “restructuring” and more as “same-old, same-old” by many. Talk is that Yahoo may sell off some of their assets. More to the point, a company´s reorganization needs to create a feeling of purpose and a determination to not just correct past errors, but enhance the strength and power of what makes the company valuable and useful in the first place. Pointing to layoffs and “restructuring” doesn´t cut it. Nor does patent attacks, as in the recent one Yahoo has filed against Facebook, show off any real strengths. Think TiVo for that — a company that has made money through patent attacks, but doesn´t seem to have much going for it when you think about it beyond that.

And the lackluster attempt at taking on the 800-pound gorilla in the room, Google, is also far from encouraging. While the Internet ad market has expanded by over 20% annually, Yahoo hasn´t been able to reap the results of this; late January showed the company reporting a drop in fourth quarter profit.

The mark of a company may be in the “now,” but for Yahoo the past is not a good indicator of future success. Especially when it seems that Yahoo is experiencing the repetition of the movie “Groundhog Day” over and over when it comes to what they´re doing with their staff. Bold moves could result in bold changes. And in a resurrection of the early, glory days. But if things stay status quo, that seems to be more a pipe dream than any glimpse at reality.


Source: Marshal Rosenthal for RedOrbit.com



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