- AP/Lionel Cironneau
Yahoo just disclosed that its headcount is now at 8,800 in total, down 2,100 compared to the same period of last year.
That’s largely due to the 15% layoff announced in February, which calls for Yahoo to cut roughly 1,600 Yahoo employees by the end of this year.
Those layoffs are still not complete. But when they are, Yahoo will be the “right size” for the current business, Yahoo CEO Marissa Mayer said on Monday, although she didn’t rule out another round of layoffs in the future.
“We could revisit our strategy and that may happen naturally through the strategic alternative process, but with the products and services we currently offer, we think this is approximately the right size overall for the company,” Mayer said.
Mayer stressed that the workforce reduction in general was a “difficult decision,” but said it has ultimately helped the company become more “efficient” and run “responsibly as a result.
Yahoo CFO Ken Goldman added that the layoffs largely help the company in two areas:
Tighter expense control: Job cuts not only help control salaries but also the investments that go into projects that may not be working, helping the company save on unnecessary spendings. “We’re really watching every dollar, maybe more so than we have in the past,” Goldman said.More effective spending: By reviewing every possible way to cut expenses, Yahoo has been able to reduce redundancies and simply build a more efficient business. “We looked at areas that we may have duplications, redundancies, where we could get the same job done with less people,” Goldman said.
But as Mayer alluded to, that doesn’t mean Yahoo won’t have to cut more jobs in the future. Depending on what happens to its core business, which is currently fielding offers for a takeover, Mayer and Yahoo’s management may be forced to cut more expenses and reduce the size of its workforce.
In fact, according to SunTrust analyst Bob Peck, Yahoo could cut another 40% of its workforce if Verizon ends up buying its core web properties. In a note published in April, Peck argued that Verizon would end up slashing all the overlapping positions, especially in sales and general operational jobs, which would help save almost $2 billion in total.
Verizon has publicly expressed interest in acquiring Yahoo and is often mentioned as the leading candidate to buy Yahoo’s core internet business. And even if Verizon doesn’t become the ultimate buyer, Peck predicts any buyer could potentially end up cutting an additional 1,000 jobs at Yahoo post-acquisition.
Mayer declined to share any more details around the sales process during today’s call, simply saying she’s “deep in the process” and that she would update investors “as soon as it’s prudent.”