Yahoo Inc is to cut about 15 per cent of its workforce and close offices in five locations as part of a turnaround plan for the struggling Internet business.
The firm announced plans to explore “ strategic alternatives” in addition to the continued pursuit of the reverse spin-off of its Internet business.
Yahoo said it would simplify its product portfolio and that it had begun to explore divesting non-strategic assets.
Falling revenues
Yahoo reported a 15 per cent fall in adjusted quarterly revenue as it struggles to keep its share of online search and display advertising in the face of tough competition from Facebook and Alphabet's Google.
Yahoo’s revenue - after deducting fees paid to partner websites - fell to $1 billion in the fourth quarter ended December 31st from $1.18 billion a year earlier.
Yahoo reported a loss of $4.43 billion, or $4.70 per share, in the quarter compared with a net income of $166.3 million, or 17 cents per share, a year earlier.
Yahoo also said it was exploring strategic alternatives, along with pursuing its reverse spin-off of its internet business. Chief executive Marissa Mayer, who joined Yahoo in 2012 from Google, has been trying to revive the Internet pioneer's core media and online advertising business by spending heavily to draw more users to its websites.
Alibaba stake
It comes as activists step up pressure on the company after Yahoo reversed course in December on plans to extricate itself from a multibillion-dollar stake in Chinese e- commerce company Alibaba Group Holding, amid rising concerns about the potential tax bill. It’s now considering bundling the rest of its assets into a separate, standalone company that would be spun off instead – a move that could take more than a year to complete.
Activist Starboard Value, which first raised concerns about Yahoo in 2014, says that’s too long for shareholders to wait -- and has urged an overhaul of the company’s management and board, saying that “significant changes” are needed. The remarks, made last month, were the strongest indication that the investment firm is gearing up for a proxy battle aimed at unseating
Yahoo directors. Starboard, which owned less than 1 per cent of the company as of the third quarter, has suggested an overhaul of management and potentially a sale of the main Web business.
Shares fell in after-hours trading on the back of the fourth-quarter results.
