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Yahoo Layoffs Begin, CEO Sends Employees Apologetic Letter
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."
And Ballmer sighs with relief at not having bought this turkey.
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.
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,...)
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?
-- "In order to have power, I must be taken seriously." -Mojo Jojo
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.
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.
Good people go to bed earlier.
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.
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.
They can't do that, it's supposed to be *my* Yahoo! and I didn't give permission...
"The urge to save humanity is almost always a false front for the urge to rule." --H.L. Mencken
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."
Go fall on your sword
Last! One! Out! Please! Turn! Off! The! Lights!
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 of "quality" CEO material, were these guys worth the investment?
By not trying to sue people for 'patent infringement'. Lawsuits are expensive.
YaLost, YaDown, YaGone. coasting too long is fatal to a dotcom.
if this is supposed to be a new economy, how come they still want my old fashioned money?
WGAFFA yahoo?
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).
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.
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
"The greatest lesson in life is to know that even fools are right sometimes" - Winston Churchill
as I didn't know there were still 2000 people employed at Yahoo.
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.
... 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).
-- the cake is a lie
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.
Please do not read this sig. Thank you.
http://www.thefreedictionary.com/yahoo
April 3rd: Facebook countersues Yahoo over 10 disputed patents
April 4th: Yahoo lays off 2,000 people.
insensitive clod overlords obligatory xkcd car analogy russian reversals whoosh pedant fanbois ftfy in 3...2...1..PROFIT
"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?
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?
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.
...if Yahoo had employees, why could I never get a human answer to an email?
Oh, I'm sorry sir, I thought you were referring to me, Mr. Wensleydale.
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.
Please do not read this sig. Thank you.
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.
Join the Slashcott! Feb 10 thru Feb 17!
Why is it that Yahoo has job listings on Craigslist? Surely some of those 2,000 had the skills to fill those positions?!
Sorry, but sooner or later you have to start making a product or providing a service that people actually want to buy.
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 ?
Jack be nimble
Jack be quick
Jack got laid off by a hedgefund manager dick.
GO TEAM SUE!
...because the company was stupid for not taking microsoft's money ;)
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/
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
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).
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.
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.
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 ;-)
That's phone sanitizer to you Sir!
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.
Maybe if they didn't spend so much time wasting money on shitty copyright lawsuits, which they're not likely to win, they'd have enough money to keep their employees around. Lame.
No true capitalist has reasonable, non-exploitive beliefs, huh?
I believe the means of production should be controled by people who have proven themselves good at producing stuff that people want, at a profit. That's pretty much the definition of capitalism. You sem to have redefined "capitalist" as "evil pig", as if you were a stereotype of a USSR-era communist.
Socialism: a lie told by totalitarians and believed by fools.
I'm sure your bombastic speeches impress everyone lacking the ability to differentiate between capitalism, cronyism, oligarchism, and corporate fascism.
-- "In order to have power, I must be taken seriously." -Mojo Jojo
Any word on if they are doing anything with Flickr. I really rather like the service.
The company can't cut your way to profitability, but the CEO can often profit handsomely, even if he leaves a trail of ruin behind him.
It reminds me of one of the Ferengi Rules of Acquisition: "Employees are the rungs on the ladder of success. Don't hesitate to step on them."
I am officially gone from
That letter will really comfort the ex-employees as you drive home to your mansion you got for doing jack shit to actually help the company
ARTHUR: Well, we all are. we're all Britons and I am your king.
WOMAN: I didn't know we had a king. I thought we were an autonomous
collective.
DENNIS: You're fooling yourself. We're living in a dictatorship.
A self-perpetuating autocracy in which the working classes--
WOMAN: Oh there you go, bringing class into it again.
DENNIS: That's what it's all about if only people would--
ARTHUR: Please, please good people. I am in haste. Who lives
in that castle?
WOMAN: No one live there.
ARTHUR: Then who is your lord?
WOMAN: We don't have a lord.
ARTHUR: What?
DENNIS: I told you. We're an anarcho-syndicalist commune. We take
it in turns to act as a sort of executive officer for the week.
ARTHUR: Yes.
DENNIS: But all the decision of that officer have to be ratified
at a special biweekly meeting.
ARTHUR: Yes, I see.
DENNIS: By a simple majority in the case of purely internal affairs,--
ARTHUR: Be quiet!
DENNIS: --but by a two-thirds majority in the case of more--
ARTHUR: Be quiet! I order you to be quiet!
WOMAN: Order, eh -- who does he think he is?
ARTHUR: I am your king!
WOMAN: Well, I didn't vote for you.
ARTHUR: You don't vote for kings.
Their web property is just the worst, mail riddled with spam, the whole thing riddled with adds, a hairball of a UI that can't manage to prioritise the three things I did there over the 90 things they are are trying to rape my eye-sockets with.
just a friggin mess...
MySQL, lol
Yahoo has never figured out who their customer is and, consequently, has never been able to keep their customers satisfied. Google made clear not long ago that their customer is the guy who pays for the advertising. Their entire focus is and has been all about keeping that customer satisfied. Yahoo needs to spend less time, effort, and money building traffic that has no monetary value to advertisers, and more time, effort, and money building valuable traffic for their advertisers.
Facebook has the same problem, the difference is, they know it. They have tons of traffic, but nobody is there for the purpose of spending money. Consequently, the advertising on the site is not much different from shotgun junk mail. Unlike Yahoo, Facebook is working overtime trying to figure out how to get people to respond to their advertisers. I doubt they'll succeed. Facebook has all the same problems as Yahoo's Friendster and Myspace. Eventually, anyone with a credit card will tire of it and move on, leaving only 7th graders playing games for free (Friendsters current state) and posting nonsense about who wore what to school.
Google is so successful simply because people with credit cards go there to find what they want (to buy). It's an advertiser's dream. Yahoo determined their future the day they shut down their search engine. Had they invested in delivering the best search results possible and fraud free clicks for their advertisers, the public would have a choice in search today and Yahoo wouldn't be in its current state of demise.
This layoff is only the beginning of the end. A vision of the future. Yahoo has yet to learn who their customer is. When they do that, then, maybe, they might have a chance at survival, but I doubt it. They still think traffic and registered members is what it's all about.
Actually you can have an admixture of both. It isn't a binary switch where you either flip to 'free' or 'fair'.
No true capitalist has reasonable, non-exploitive beliefs, huh?
I believe the means of production should be controled by people who have proven themselves good at producing stuff that people want, at a profit. That's pretty much the definition of capitalism. You sem to have redefined "capitalist" as "evil pig", as if you were a stereotype of a USSR-era communist.
You believe that the means of production should be controlled by the people who have proven themselves "good at producing stuff that people want, at a profit", so where exactly does the worker fit in there? You know...the one who actually produces stuff... Sounds to me like you've perverted the idea of worker control by adding the "at a profit" bit,,,insinuating that it takes some kind of esoteric business knowledge to produce anything somebody wants. Why not allow the people actually producing "stuff that people want" a share of the profits? Currently, they aren't getting any. If you're saying the fat cat who owns the company or a pool of elite investors, then you're just happy with the status quo. The status quo is what we have now and it's not working out for a lot of people. It's working out great for 1% of people and getting better for them each year.
The first have of what you wrote is right on. The goal of the economy is *not* to provide jobs. The goal of the economy is to provide desired goods and services for all, ideally with the least possible cost (jobs and energy) involved. If we could make everything we needed with solar-powered robots, so that no one had to work, shouldn't we?
Profit is simply objective proof that what's being made is in fact desired by whoever is using it - that its consumer sees more value in it that the work it takes to make it.
Technology (the ability to produce goods with less labor and energy) doesn't happen by magic, yet it is by far the dominant factor affecting quality of life. Workers are skilled at what they do, and deciding what efforts to fund is an entirely different skill. You want control of the means of production in the hands of people skilled at deciding what the customers really want, and how to fill that need effeciently, which may involve no workers at all as automaiton progresses.
You notice nowhere here did I adreess how much anyone gets paid? How we divide the pie is almost insignificant compared to technology. No possible division of wealth in 1750 would have given the common man the standard of living availble to the working poor today. 95% of Americans live better than 99% of everyone who has ever lived. Stop worrying about your neighbor having more than you - it's meaningless in the big picture.
Socialism: a lie told by totalitarians and believed by fools.
Ah, I see. Thousands of econonomists over time have said you can't cut your way to profits, but if it gets repeated in one article you read, we're all just parrots. Specious logic, much?
-- "In order to have power, I must be taken seriously." -Mojo Jojo
Cuptopia.com is a startup Internet Technology Company seeking to compete in the Networking Space and would love to hire Yahoo's Ex-Employees. http://www.Cuptoopia.com A new way to Socially Collaborate To Make Money Without Greed. Their skills are in demand. Cuptoopia doesn't have funding yet, but will soon have stock equity. Contact Founder & CEO Charles E. Campbell wbsbpd88@hotmail.com
My Dear Ex-Fellow Employees,
I am heartbroken to admit that I had to lay you off due to my and my fellow executive's ineptitude and greed. But rest assured that I will have you in my thoughts and prayers as I sit on my yacht in the sun and eat caviar and drink Champagne, wishing I could have done more to keep you on as breadwinners for your families.
Best Wishes,
Your Ex-CEO