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Yahoo To Fire Another 15% As Mayer Attempts To Hang On (theguardian.com)
New submitter xxxJonBoyxxx writes: Yahoo chief executive Marissa Mayer has announced plans to cut the company's workforce by 15% and close five foreign offices by the end of 2016 after announcing a $4.4bn loss. Yahoo shares have fallen 33% over the past year, including a 17% drop in the last three months. Its shares fell again in after-hours trading after Mayer announced her plan. Yahoo expects its workforce to be down to 9,000 and have fewer than 1,000 contractors by end of 2016. About a third of Yahoo's workforce has left either voluntarily or involuntarily over the last year. And the cuts may just be starting: one activist investor (SpringOwl) says the total number of employees should be closer to 3,000 for a company with its revenue.
... she'd fire herself.
It is hard to believe that Yahoo used to be one of the top search engines with a nice bright future. Now it has a bit less that 10% of Google's revenue, and it keeps dropping. I don't think this is a case of economies of scale... Google isn't the only online advertiser making money. But Yahoo somehow continues to lose money in this ever growing market.
Bottom line: Management at Yahoo sucks. The company should be sold in a fire sale as it has little prospects for turning things around.
The problem with a volunteering leaving of a company is a really bad thing, almost worse than layoffs. While it makes it easier for the managers to sleep at night knowing that they don't have to let a person go, which for most humans really hate doing.
But for the company the people who are smart enough to see the writing on the wall, know to jump ship early knowing that they can get a good or better job elsewhere. The ones who stick around are often the ones who lack the experience to see the warning signs, or just don't have the skills to get another job, and gamble on not being the one who gets canned. Thus populating the company with less experience or less than ideal employees. This creates a downward spiral of less quality and causing real layoffs (as we see here) which makes allowing for growth much harder.
But when you see voluntary leaving it is a bad sign.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
She'll get all the credit she deserves for the failure. Maybe she could run for office after she's done sandbagging Yahoo.
From what I can see, it's not so much that Mayer has made a bunch of bad decisions, but rather that she hasn't made any decisions at all. Well before she took over, everyone knew that Yahoo was in trouble and that their status quo wasn't tenable. So she was fully expected to come in and make sweeping and disruptive changes, hopefully thereby saving the company.
But what has she even attempted to change? From the outside at least, Yahoo as it exists in 2016 still seems fundamentally identical to Yahoo as it was in 2012, or for that matter, in 2006. The only plan I even heard about was that idea to split off the company into two pieces, let the unprofitable half (i.e. Yahoo) die off, and focus on the profitable half (i.e. partial ownership of Alibaba). And that's not really even a plan, that's just surrender.
Do something, at least. This wait-and-see stuff is no good. I'm pretty sure you won't like seeing what you waited for.
Are the people who produced the horrid piece of trash they now call a web site part of the 15% being sent packing? What used to be a fairly easy way of getting stories in an easy-to-use format is now a jumbled mess of shitty colors and blocky outlines.
I, and many others I have heard, have stopped going to their site as a direct result of the change. If Mayer, or the morons in charge of web design, were hoping to get more eyeballs to their site, they have failed miserably.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
It's an activist investor. Their entire M.O. is pump, dump, and piss on the smoldering crater left behind.
"Oh my God. This is terrible. This is the end of my Presidency. I'm fucked."; ~ Donald J. Trump
Layoffs should always be a last resort in positions that require technical talent. This goes double if your staff are more experienced and able to see the writing on the wall. I've chosen companies carefully over the years and have had long tenures at places I've worked. But, when a talented person who can get a job somewhere else sees the layoff balloons going up, the immediate thought is whether or not they'll be next. This causes everyone good to head for the exits, and you're left with the low-talent people who are just hanging on hoping they don't get it in the next round. This has happened to me twice, and I've carefully considered my options both times, opting to leave before things got worse.
This is partially driven by the (irrational) preference to hire only employed people. I know a lot of talented people who've just been blindsided by a sudden layoff, capricious firing or even the business going bankrupt. The road back for these people is very hard and they often have to take lower-salary work or work for companies with less-than-ideal working conditions.
Doesn't it burn your ass to know that if she were to get fired, she'd walk away with tens of millions of dollars?
Why would it? To the class of workers Marissa Mayer belongs to, tens of millions of dollars is not a huge sum. Her net worth was about $300 million in 2012 when she took the the Yahoo job. Tens of millions of dollars to her is more like a tens of thousands of dollars to me, which would be a very reasonable severance package to someone in my position.
Just like you probably make far more money than people working in third world slums, Marissa Mayers makes far more money than you. Comparing the salaries of people in completely different classes of society is not very useful.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Doesn't it burn your ass to know that if she were to get fired, she'd walk away with tens of millions of dollars?
Why would it? To the class of workers Marissa Mayer belongs to, tens of millions of dollars is not a huge sum. Her net worth was about $300 million in 2012 when she took the the Yahoo job. Tens of millions of dollars to her is more like a tens of thousands of dollars to me, which would be a very reasonable severance package to someone in my position.
Just like you probably make far more money than people working in third world slums, Marissa Mayers makes far more money than you. Comparing the salaries of people in completely different classes of society is not very useful.
I totally agree with what you're saying. Here's where it breaks down. Mayer has a bunch of money due solely to incredibly good luck and timing. Nothing more. It has nothing to do with her abilities (obviously), education, or any of that. She was in the right place at the right time.
So she's in a "class" that's occupied by people who made a bunch of money at business, and powerball winners. Although she made her money in business technically the reality is that she's on the "powerball winner" side of the aisle, if you catch my drift. So it's not terribly surprising that when you put her into a position like this she falters.
Of course, she is in an impossible position, anyway, but the company should have pulled a real entrepreneur in if they wanted to have a radical turnaround.
Do you have ESP?
Comparing the salaries of people in completely different classes of society is not very useful.
Your argument is very worrying not only because it is tautological but because we can never stop ever increasing income inequality if people 'accept it'. The ratio of CEO pay to average worker pay is about 350. In 1965 it was 20. The committee that decides executive compensation is stacked so that people serve on each others compensation committees guaranteeing extravagant salaries. They also prevent a more meritocratic search going out to the general population. It also is one of the reasons why average pay has fallen or stagnated for most people in the US - money spent on executives means less cash for the workers.
And you might also want to think about pay in terms of productivity. Since 1973 it has gone up by about 100% in the US. And yet wages for many people have fallen in real terms. Median household income should be double what it is and perhaps more given that the number of working adults per household has increased as women have gone to work full time.
In terms of finding 'good people'. I have personally met outstanding people who not only are smart and well educated but have excellent communications and people skills. They made good money - mid six figures. I am certain they could have done a better job than Marissa Mayer running Yahoo and they would have agreed to do it for a mere $1 million. Yet they are never seriously considered because of the tight knit and self referential world of executives.
What's so sad is that this is a bum deal for shareholders - even if you are capitalist and don't have any compassion on people getting poorer you should at least be bothered by the fact that awful CEOs like Marissa Mayer and Steve Ballmer get to destroy value at a company and get paid 8 figures to do so. Imagine that instead of hiring Steve Ballmer, Microsoft would have merely hired an average MIT PhD engineering graduate in their 30s or 40s with some business and management experience. Think about how much better off Microsoft would have been in 2013 when Ballmer did finally leave.
I totally agree with what you're saying. Here's where it breaks down. Mayer has a bunch of money due solely to incredibly good luck and timing. Nothing more. It has nothing to do with her abilities (obviously), education, or any of that. She was in the right place at the right time.
So she's in a "class" that's occupied by people who made a bunch of money at business, and powerball winners. Although she made her money in business technically the reality is that she's on the "powerball winner" side of the aisle, if you catch my drift. So it's not terribly surprising that when you put her into a position like this she falters.
I also agree with you that Marissa Mayer was not up for this task. I thought it was a bad decision in 2012 and I still think that now. But I do think it is unfair to lump her in with "powerball winners", even if just metaphorically. She was certainly lucky to have the opportunity to be rewarded for her skills with hundreds of millions of dollars. But it was her accomplishments that earned her the job with Google, and it was her accomplishments that allowed her to succeed at Google. Not all of the 18 employees hired before Marissa or the 20 or so employees hired after her had the same level of success. A large portion of the credit for that success does go to Marissa.
That said, if she re-lived her life 100 times with slight modifications she is probably only a Senior VP at some company in most of those lives. But that could be said for the vast majority if not all of the world's self-made wealthy elite. There is always a hefty amount of both luck and ability involved in making hundreds of millions of dollars. If you treated every successful businessperson who had a lucky career as a "powerball winner", they would probably all earn that distinction.
Of course, she is in an impossible position, anyway, but the company should have pulled a real entrepreneur in if they wanted to have a radical turnaround.
Most "real entrepreneurs" were just as lucky as Marissa Mayer when achieving their success. That includes Larry Page and Sergey Brin. Yahoo could have certainly chosen other startup founders / early employees, but something about Mrs. Mayer made them think she was the right person for the job. That may have been a bad decision, or someone else may have failed even harder. It really is impossible to know for sure.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
And you might also want to think about pay in terms of productivity. Since 1973 it has gone up by about 100% in the US. And yet wages for many people have fallen in real terms. Median household income should be double what it is and perhaps more given that the number of working adults per household has increased as women have gone to work full time.
That depends on why productivity has risen in the past 40 years. In the mid 1900's I would attribute most of that to educating the middle class. From 1900 to 1960 the number of college graduates rose from about 7% to 25%, over a 200% increase. From 1960-Today it has only risen to about 30%: a 20% increase. In the mid 1900's the workers were seeing increased wages along with their increased productivity because it was their increased skills that made them more productive.
For the past 40 years, however, I believe most of the increased productivity has come from increased investment in equipment, such as computers and robotics. Therefore now the benefits of increased productivity is going to those who invested in that equipment, not the people who use them. That is only a theory but I think it reflects the economic reality very well.
In terms of finding 'good people'. I have personally met outstanding people who not only are smart and well educated but have excellent communications and people skills. They made good money - mid six figures. I am certain they could have done a better job than Marissa Mayer running Yahoo and they would have agreed to do it for a mere $1 million. Yet they are never seriously considered because of the tight knit and self referential world of executives.
One of those people may have done a better job than Marissa Mayer, although of course it is only with hindsight that we believe Marissa did a poor job. The important thing to remember is there isn't much of a difference between a CEO making $1 million per year or $23 million. You are comparing 0.02% of Yahoo's yearly revenue with 0.5%. If for whatever reason I thought a VP at a $200 billion company could improve my company's revenue by 2% more than one of your middle management $150k salary friends, I would gladly pay that extra $20 million per year.
I believe you are correct that a vast number of skilled people are passed over for executives positions because they are never considered. But just like I want a plumber or my house who has worked on a residential home instead of just commercial buildings, a company board wants someone from senior management in a successful multi-billion dollar company to run their multi-billion dollar company. They don't want to take a chance the best SMB printer sales manager in Ohio. I can't really blame them, because when I hire people for personal or professional reasons I also want someone who's current career trajectory shows they are a good fit for the job.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke