The inside story of why Marissa Mayer's most trusted executives have given up on Yahoo

When Yahoo CEO Marissa Mayer made public comments that appeared to bash recently-departed executives earlier this month, some of them were surprised and upset, people close to the matter told Business Insider.

Some even felt it was dishonest.

Mayer's executive bench has been bolting as Mayer struggles to grow revenue or develop new hit products. The two most recent departures were Jackie Reses and Kathy Savitt. Both were handpicked by Mayer. Reses ran M&A and human resources and was one of Mayer's key lieutenants. She left this month for Square. Marketing boss Kathy Savitt left last month for STX Entertainment.

They joined a long line of other departures, as reported by Re/code, including marketing partnerships head Lisa Licht (who hasn't announced a new job yet); Yahoo's chief information security officer Alex Stamos (who went to Facebook); and Yahoo's SVP of advertising and data platforms Scott Burke (now at Helix).

The departures, and Yahoo's reaction to them, reflect the growing turmoil and frustration inside one of the world's pioneering internet companies as a once-heralded three-year comeback effort now appears to be running out of steam and investor pressure is mounting.

When Mayer talked to Wall Street analysts after reporting another disappointing quarter, she told them that such departures were part of a "design" and were "the result of careful planning to achieve the necessary skills, passion, and the ability to execute growth in our business."

In other words, she suggested that these execs lacked the right abilities and that Mayer was switching things up by design.

'Disgraceful'

That statement was "disgraceful" said a person familiar with the departures, and bordered on "a lie."

Many of the execs are quitting because they've grown weary of Mayer's tight-fisted management style and they have great job offers elsewhere, people close to the situation said.

"She should have simply said that people leave for a lot of reasons and that Yahoo has a deep bench of leaders and is feeling really good about its future," one person said.

Another former Yahoo insider was less critical, saying that Mayer used a poor choice of words in describing the departures. But the person said they were not personally offended or upset, and that most people didn't believe the comments were true anyway.

"I was very hopeful" while at Yahoo, the person said. "Ultimately we didn't see eye-to-eye on parts of the core business, but we didn't have any interpersonal clash," the person said of the relationship with Mayer.

Yahoo declined to comment for this story.

Rising stars

Yahoo's turnaround effort is an intense and tiring job, so it's not surprising that some level of tension and frustration would arise within the top ranks.

Savitt, who oversaw Yahoo's marketing and its growing editorial ambitions, was considered a rising star at Yahoo, but Savitt was frustrated with the strategy decisions Mayer has been making, leading her to take the job at Hollywood studio STX Entertainment. While Savitt was instrumental in Yahoo's push to offer original video programming, Mayer is now backing off some of those ambitions with the recent $42 million write-down of video shows such as "Community."

Reses, on the other hand, agonized over leaving Yahoo. When she jumped ship, it wasn't because of a single dramatic moment of conflict with Mayer.

Reses was Mayer's point person for the relationship with Chinese e-commerce giant Alibaba Group, in which Yahoo currently owns a 15% stake. She worked closely on the blockbuster Alibaba IPO and renegotiated a deal that allowed Yahoo to sell fewer shares during the IPO and keep more.

Mayer sent an email to the troops in July indicating that Reses would take a "leadership role" in a new holding company that Yahoo hopes to create when it spins out its remaining shares in Alibaba. But it wasn't clear if Reses was going to be asked to become its CEO or not.

On top of that, Mayer and Reses increasingly disagreed on everything from how to handle HR issues to how much to value potential acquisitions.

Another big loss for the team was Scott Burke. He left on good terms, one person said, but he was responsible for the syndication strategy that is underpinning the growth in Yahoo's display business.

Mayer is playing defense

The management changes come as Yahoo's turnaround effort remains stuck in the mud, with revenue in the most recent quarter up a scant 2 percent from the same period in 2012, when Mayer first took the reins. And with Yahoo getting closer to spinning off the Alibaba shares, Wall Street will soon focus more on Yahoo's struggling core business. Some people have speculated that Yahoo could become a target for a private equity play.

Meanwhile, Mayer, who has a reputation for a very controlling management style, is by some accounts becoming increasingly demanding and challenging to work with.

"The world is crashing in on her and she's feeling the pressure," one person said.

Another told us, "She doesn't listen to what others have to say."

Several of Mayer's most-trusted lieutenants remain, including CFO Ken Goldman, emerging products boss Adam Cahan and product and engineering SVP Simon Khalaf.

The bigger question is if Yahoo's board is paying attention. One of the people we spoke to believes the board is "being spun" about why all these executives are leaving.

"You can explain any one of these departures away," this person said. "But you don't go looking for a new job unless you're miserable."