On January 15, Dr. Eowyn reported on the five signs that U.S. and world economy is in trouble. This includes the fact that retail sales are collapsing, U.S. industrial production plunged (which is the fastest pace of collapse since May 2008), and hundreds of Wal-Marts are to be closed.
Yesterday I reported on how our economy grew at an annualized rate of just 0.7% in the fourth quarter of 2015 compared with the same quarter a year ago, official figures show. This is a sharp slowdown from the 2% growth recorded in the previous quarter.
Now comes the news that Yahoo is set to reveal cost-cutting plans that include slashing 15 percent of its workforce, or roughly 1,600 jobs, and closing several business units, the Wall Street Journal reported yesterday.
Reuters reports that the plans are expected to be announced after Yahoo’s fourth-quarter results on Tuesday and did specify which business units might be closed. A Yahoo spokeswoman said the company could not comment during its quiet period before releasing earnings.
Activist investors have pressed Yahoo to sell its core business rather than spin it off, even though a sale would likely incur more taxes. Last month, activist investor Starboard Value LP sent a letter to Yahoo taking aim at Chief Executive Marissa Mayer and her leadership team and raising the prospect of a proxy battle. The letter implied Mayer and other executives needed to leave, without naming her. It is unclear whether the plan Mayer is expected to announce would satisfy their demands, but cutting costs could make Yahoo more attractive to buyers.
Yahoo had about 11,000 employees as of June 30, according to its website, down from a Dec. 31, 2014 total of about 12,500 full-time employees and what it called fixed term contractors.
Last week Yahoo confirmed plans to close its offices in Argentina and Mexico. The company declined to specify how many jobs were affected, but said the offices were small and “sales-focused.” Yahoo has struggled to expand its Internet business, which includes selling search and display ads on its news and sports sites and email service, in the face of competition from Alphabet Inc’s Google unit and Facebook.
Mayer’s turnaround efforts have had little tangible effect so far.
Yahoo’s revenue has fallen slightly since she took the helm in mid-2012, and its share of U.S. Web searches is essentially flat with three years ago, gaining no ground on market leader Google. Yahoo’s shares fell 1.2 percent to $29.14 in afternoon trading on Monday. As of Friday’s close, the stock had lost about a third of its value over the year.
DCG
