You’ve got to feel for this company — Yahoo’s had a really tough year. Yesterday the company reported its third-quarter earnings. Analysts didn’t expect much, and Yahoo didn’t give them much.
As far as the Street was concerned, the brightest spot of the whole ordeal was the way that the executives stressed the disciplined approach they would take for reining in costs as they “batten down the hatches” to weather the economic storm, as President Sue Decker put it.
Where will those economies be found? By trimming the company’s chief expense: headcount. At least 10 percent of the workforce, or 1,500 employees, gone by the end of the year.
The cuts were widely expected, but CEO Jerry Yang officially let the troops know yesterday afternoon, after the earnings call, via a very characteristically Yahoo memo — beginning with the salutation, “dear yahoos,” and written almost entirely in lower-case.
The first upper-case letters are reserved for Bain & Co., the consulting company that Yahoo hired earlier this year to advise it on improving efficiencies.
Here’s the guts of the thing:
“affected employees will be notified of layoffs in the next several weeks. we understand that hearing this news now creates uncertainty, but we are moving ahead in a way that balances speed with a clear focus on accomplishing what is necessary to set the organization up for long term success. going forward it will continue to be important for us to make the right decisions to keep our business efficient and strong.
“having layoffs is very difficult, particularly in light of all we’ve experienced this year. but we don’t take these decisions lightly, and are committed to treating affected employees fairly, offering severance and outplacement services.
“the steps we are taking are not easy for us as a company, but as we become more fit as an organization, decision-making will be faster and it will be easier for us all to get more done and stay focused on our strategy. these changes will also prepare us to better deal with the macroeconomic downturn. as with previous downturns, yahoo! continues to be a place where consumers turn for information and communications, and is an integral part of their internet day. as the global economy improves in the future, i certainly believe that we will be stronger and benefit from the actions we are taking now.”
I’ve heard Yahoo described variously as an idea, a dream, a vision — always something more than a company. But, at the end of the day, that’s what it is. And while Yahoo’s taken heat for the last few years for its slumping stock price, the tailspin began in earnest when the talks with Microsoft broke down. Yahoo managed to preserve its independence, but at what price? At present, much of its hopes rest on the streamlining efforts and the consummation of the ad deal with Google, itself an uncertain prospect. But then again, Yahoo’s plea for support throughout this choppy year hasn’t had much to do with certainty. It’s really more been a matter of faith.