The new chief executive of troubled tech giant Yahoo is planning a major reorganization that could result in “thousands” of layoffs, according to a new report by AllThingsD’s Kara Swisher. Such a shakeup, which could begin as soon as the end of the month, would be only the latest attempt by Yahoo to reinvigorate its business after years of decline.
New CEO Scott Thompson, who joined the company following the departure of Carol Bartz last fall, has embarked on a mission to get Yahoo’s house in order. As part of that effort, he has brought in Boston Consulting Group to help identify the company’s strengths and best position it for the road ahead. The layoffs could affect Yahoo’s products division, as well as “public relations and marketing, research, marginal businesses and weaker regional efforts,” according to the report.
In an ominous sign for Yahoo’s 14,000 employees, Swisher reports that although Yahoo has experienced rounds of layoffs in the past, “none has been as large as what is now being contemplated to slash costs.” One manager is quoted as saying that the cuts will be “deep.”
Thompson is also behind Yahoo’s effort to bolster its intellectual property position, according to the report, which led to the company’s recent demand that Facebook pay it licensing fees to cover social networking technology patents — or else face a potentially costly legal dispute. Thompson is also tasked with finding an exit for the company’s valuable Asian assets, including a large stake in Chinese e-commerce giant Alibaba, which are worth an estimated $20 billion.
Yahoo, a onetime Internet pioneer, has experienced a long, painful slide in recent years as it’s been eclipsed, not only by one-time rival Google, but also by social media upstarts like Facebook and Twitter. Last September, Carol Bartz was fired as CEO and in January, co-founder Jerry Yang left the company. In February, board chairman Roy Bostock resigned, clearing the way for Yahoo to sell its valuable Asian assets, but those talks have faltered.
Swisher has an almost uncanny track-record of being correct about impending Yahoo news — so much so that she was recently highlighted in a research report by Macquarie analyst Ben Schachter. “It continues to concern us that one particular journalist, Kara Swisher, frequently seems to be privy to such precise information regarding Yahoo,” Schachter wrote. “While we give much credit to Kara for her ability to obtain this information, we believe it reflects very poorly on Yahoo’s ability to maneuver effectively outside the public spotlight.”