Yahoo is prepping to lay off 10 percent or more of its workforce


Marissa Mayer

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Yahoo CEO Marissa Mayer

Major layoffs will be coming to Yahoo as part of its planned reorganization to get its business back on track.


The company is working on a plan to cut at least 10 percent of its workforce, said sources familiar with the situation. The cuts would reduce Yahoo's headcount by more than a thousand employees and could begin as early as this month, the sources said.

While the cuts are expected to affect all parts of the company, Yahoo's media business, its European operations and its platforms technology group, which includes the technology that supports the company's services, could be particularly hit in the restructuring.

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"A team is working on it and they want to do it this quarter," one of the sources said of the layoffs.

Yahoo declined to comment on the layoffs. However the company has acknowledged that change is afoot. In response to criticism from activist investor Starboard, Yahoo told Business Insider earlier on Wednesday that the company plans to announce "additional plans for a more focused Yahoo on or before our Q4 earnings call," which should be in the next few weeks.


There's been considerable pressure on the company to find a new path forward after a three-year turnaround failed to revitalize the business. At least one investor called for CEO Marissa Mayer to slash the company's size to only 3,000 people while others are hoping that Mayer will be taken off the roster herself.

Several employees told Business Insider that they have been bracing for layoffs since Yahoo hired McKinsey & Co. in November to mull a re-org and decide which units to potentially shutter. The company has decreased its headcount by 14 percent over the last year in a steady drip of layoffs, according to its most recent quarterly report, but it still employs more than 10,000 people. Trimming by 10 percent means more than 1,000 people would leave Yahoo.

One major focus of Yahoo's re-organization is its media properties, or "digital magazines" as the company calls them.

Last week, the company announced that it had shuttered Yahoo Screen, its larger all-encompassing video hub to build out the magazines. However, those magazine divisions still have not seen their budgets for 2016, stalling their coverage, one Yahoo insider tells us. Without a budget, coverage of events like the Golden Globes awards show this weekend is up in the air, a person familiar with the matter said.

To cut more costs, the company also scaled back operations at its production studios for the last two weeks of the year to save money on contractors, another person familiar with the matter said. The timing of the layoffs also comes ahead of when Yahoo typically doles out annual bonuses.


Meanwhile, the company has been quietly shopping around a large parcel of land near its Silicon Valley headquarters that was once its designated landing zone for corporate expansion, signaling that those plans have likely been put on hold indefinitely.

Re/Code's Kara Swisher first reported in December that a major media restructuring was expected. That part of Yahoo's business had moved to the control of Martha Nelson, who replaced Kathy Savitt after she left to join STX Entertainment. Under Nelson, Yahoo hired another Time veteran Mark Golin - a leader some Yahoo employees feel is there to lead the consolidation of some of the media teams.

It will take a few weeks before the full picture of the future of Yahoo crystallizes, but its employees are bracing for the axe to fall soon.

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