Bad news for internet giant Yahoo! shows no sign of stopping as it was announced that they would be cutting 15% of their 14,000 personnel workforce across Yahoo and AOL globally. This amounts to as many as 2,100 jobs in total. Yahoo! will be merged with Verizon’s AOL unit and renamed “Oath”. This comes after approval of $4.48 billion acquisition of Yahoo’s internet business and combining it with AOL by telecom giant Verizon.
This is yet another nail in the coffin of a company which was once bigger than Apple, Google and Amazon. Yahoo’s multitude of troubles over the past few years are well documented. The downward spiral started when CEO Marissa Mayer’s grand plan to revive Yahoo! fell flat on its face. ‘MaVeNS’, it outlined Yahoo’s strategy to target mobile, video, native advertising and social networking. This strategy failed to take off for several reasons, many of which we have previously outlined.
Ultimately it was decided by the board of directors that the company would be up for sale. US telecom giant Verizon eventually acquired for a reported $4.8 billion. This represented a very sad position for a company has been here since dial up the internet, and which was once valued at $128 billion dollars.
While it is disappointing to see it happened, it is hardly surprising that Yahoo! is laying off a major proportion of their workforce. Over the past few years, Yahoo! has developed the unfortunate reputation for having to downsize. In February of 2016, Yahoo! cut 15% of its workforce (about 1,700 jobs) as a result of their exit from offices in Dubai, Milan, Madrid, Buenos Aires and Mexico City. Yahoo! also had to cut over 1,100 jobs over the period of 2015 due to troubles for their Indian, Canadian and Beijing offices. On the other end of the spectrum, AOL has had similar troubles of their own including massive layoffs. This was followed by their acquisition by Verizon.
This is only the tip of the iceberg. Yahoo! even had other problems with two massive security breaches, causing their sale price to go down by $350 million. Page views for Yahoo’s core verticals also went down after the company reported the second breach.
However, there is some glimmer of hope for Yahoo! still. Their revenue for Q1 2017 grew to $1,327 million from $1,087 million in Q1 2016. This represented a YoY growth of 22%. Revenue from the mobile, video, native and social (Mavens) business also went up to $529 million in Q1 2017, from $390 million in Q1 2016, an improvement of 35.64%. Mobile revenues also increased to $412 million in Q1 2017, a 58.5% increase from the first quarter of 2016. It is clear that Yahoo! will never reclaim their past glory, however, there is still a chance that they may yet thrive again.