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February 3, 2016updated 04 Sep 2016 10:41pm

Yahoo to slash workforce by 15% and close offices after reporting $4.4bn loss

News: The company announced an aggressive strategic plan to improve profitability.

By CBR Staff Writer

Yahoo has unveiled plans to cut its workforce by 15% and close five foreign offices by the end of this year.

The company reported a $4.4bn loss, or $4.70 per share, for the fourth quarter ending 31 December 2015. This is compared to a net income of $166m, or $0.17 per share, for the same period in 2014.

Revenue for the quarter increased slightly to $1.27bn from $1.25bn last year.

Traffic-acquisition costs, the amount Yahoo invests to attract users to its websites, increased to $271m from $74m a year earlier.

Search revenue dropped 7% to $866m and the number of paid clicks decreased 10%. Display revenue increased 13% to $601m and the number of ads sold grew 8% in the quarter.

Yahoo CEO Marissa Mayer has been under pressure from activist shareholders who are unhappy with her leadership.

Under the latest strategic plan, the company intends to accelerate its transformation and enhance consumer and advertiser product quality.

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Plans also include increasing daily active users and driving continued growth in revenue, realised via Mavens (mobile, video, native and social), to $1.8bn this year.

The company plans to shutter offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan by the end of the first quarter.

Yahoo expects its workforce to be down to around 9,000 and have less than 1,000 contractors by the end of this year. The changes are expected to result in savings in short term operating expense of $400m annually.

The job cuts are not the initial round of layoffs under Mayer’s leadership. Approximately a third of the company’s workforce has left over the last year.

Mayer said: "This is a strong plan calling for bold shifts in products and in resources. We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social.

"Our strategic bets in Mavens have enabled us build an entirely new, forward-leaning business of tremendous scale and growth in just three years."

The company’s board will also explore additional strategic alternatives in parallel to the implementation of the management plan.

Yahoo chairman of the board Maynard Webb said: "Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximisation."

Last month, Yahoo abandoned plans to spin off its remaining stake in Alibaba in favour of transferring its core internet business to a new company.


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