
Yahoo announces 2,000 job cuts - inerte
http://finance.yahoo.com/news/yahoo-statement-131500015.html
======
lkrubner
I am frustrated to see a great company get destroyed like this.

Scott Thompson, CEO of Yahoo! says:

"We are intensifying our efforts on our core businesses and redeploying
resources to our most urgent priorities. "

In the background, unstated but assumed, is the theory of business "core
competence". I believe the phrase was invented by by C.K. Prahalad and Gary
Hamel in this May, 1990 issue of the Harvard Business Review:

[http://hbr.org/1990/05/the-core-competence-of-the-
corporatio...](http://hbr.org/1990/05/the-core-competence-of-the-
corporation/ar/1)

Sometimes a great essay gets badly misinterpreted.

Since that time, there have been many, many books that have developed this
idea. See "Strategic Management and Core Competencies: Theory and Application"
by Anders Drejer.

Inspirational for this concept was what Jack Welch argued for while he was CEO
of GE, during the 80s and 90s: the company must be in the #1 or #2 spot in any
industry, otherwise they will leave that industry. This is taught to MBAs. I
have the sense that most of them draw this lesson: shrink the company down and
focus on whatever currently works. My concern is that this frequently means
focusing on what works in the short-term, without much thinking about where
growth will come from over the long-term.

The original essay by C.K. Prahalad and Gary Hamel can be interpreted in
another way. This sentence sounds like it is describing Amazon.com, constantly
inventing new services:

"A few companies have proven themselves adept at inventing new markets,
quickly entering emerging markets, and dramatically shifting patterns of
customer choice in established markets."

When CEOs have no idea what a company should do in the long-term, they claim
that the company is going to focus "our efforts on our core businesses". There
is absolutely no hope for a company that follows that strategy. Especially in
technology, where things change quickly, one needs to be inventing the new,
new thing, or one is dead.

~~~
jpdoctor
> _I believe the phrase was invented by by C.K. Prahalad and Gary Hamel in
> this May, 1990 issue of the Harvard Business Review_

A quick search of google will show you it was around quite a long time before
that.

> _Inspirational for this concept was what Jack Welch argued for while he was
> CEO of GE, during the 80s and 90s: the company must be in the #1 or #2 spot
> in any industry_

Jack Welch took an industrial organization and mortgaged it. GE capital was an
enormous percentage of the company when he left. Sure enough, a credit
contraction caused GE to take a bailout in 2008.

He talked a great game, but their performance was exposed after he left.

~~~
crazygringo
From Wikipedia:

"A core competency is a concept in management theory originally advocated by
CK Prahalad, and Gary Hamel, two business book writers."

No doubt the phrase was used before then, but I've never heard anyone suggest
that the very specific business meaning it has now existed before their
article.

------
xyahoo
Yahoo has over 18,000 employees (and not 14,000). The extra 4,000+ are
contractors. This is a scheme that the bureaucrats at Yahoo figured out pretty
early: announce layoffs, and then bring the employees back as contractors.
"win-win for everyone", they joke.

I really, really hate to see people get laid off; But this was a long time
coming. As an ex-Yahoo, I hope they cut out the thick layer of bureacracy
thats sucking the oxygen out of that place. Ever seen the algae that
suffocates a pond? The middle managers there are like that algae. And then
there the VPs: at last count Yahoo had over 200 VPs. Really, What do these
fuckers do!?

If Yahoo can become more engineering-centric, it has a chance. If the middle
managers (and VPs) win out, stick a fork in it; theres no hope.

~~~
MrFoof
>And then there the VPs: at last count Yahoo had over 200 VPs. Really, What do
these fuckers do!?

These folks simply have goofy titles.

I used to have one of the world's largest banks (by AUM) as a client. They had
over 200 "Vice Presidents" in one building, as it basically was their
preferred title for "manager".

~~~
jrockway
At Bank of America, VP was one title _below_ most managers. VP basically meant
"didn't get completely fucked in the offer negotiation process".

~~~
jmount
Bank VP is a different situation, most branches can not issues loans without a
VP present- so there are many people with such title. There is standard and
there no confusion that this is a high title in banking. Other titles like
"Executive VP" are used to identify actual officers. That being said- I would
still be interested in hearing if everybody at Yahoo is a director and/or a
VP.

~~~
MrFoof
>Bank VP is a different situation Not in investment banks, which have no
retail presence at all.

------
ComputerGuru
It seems that I'm the only one here in the comments with this opinion, but I
think it's "not a bad thing" (TM).

Yahoo! _can_ still make money. It can still be a "successful" company. What
it's not any more is a giant that can be ranked along the likes of Microsoft,
Google, and as of very recently and who knows for how long, Facebook. What it
needs to do is become much, much slimmer. Focus on its core products, come up
with good ways to capitalize on their (still) enormous user base while it
lasts, and cut the fat.

The fact of the matter is that any company going from one of the biggest
giants in the industry to "just another tech company" has tons of fat it needs
to shave off. Yes, it sucks that our friends and family are losing their jobs,
but from Yahoo!'s point of view, it's really the only solution at this point.
They've tried to maintain their "giant" status for a few years now, and a
demi-merger with MS would have been their last hope. But it's clear that it's
not working and Yahoo! needs to slim down, focus, and then worry about
reclaiming its spot in the limelight. You can't rebuild while losing money at
the seams.

I would argue that to maintain their _core_ identity and products, two
thousand employees isn't even close to cutting it. They need to cut anything
that takes too much effort/money, employs too many employees, and isn't one of
their core strengths. They don't need 14k/18k employees, they need to get rid
of eight to ten thousand of those and hire just a hundred or so hard-core R&D
idea/deployment heads, and work their way from there.

The only thing that Yahoo! _can't_ do is pretend everything is fine and dandy
until it's too late to do anything about it. Like it or not, the people (these
human beings with families that are about to lose their jobs) that were hired
during days of yore are simply not sustainable nor in the company's best
interest to keep.

~~~
earl
Just a quick point: Yahoo is quite profitable [1], just not as profitable as
some investors wish. I only see one quarter of the last 20 with negative EPS.

<http://data.cnbc.com/quotes/YHOO/tab/5>

edit: Also, I see essentially no hope for Y! though I'd love to be wrong.
Consider:

(1) they should have _owned_ the display rtb market. Instead, internal
bickering and stupidity handed it to Google. Y! had the first rtb system
(rmx), and screwed up so badly that the current next best rtb system compared
to google -- appnexus -- is run by the former rmx cto. This will be the next
business that is material to google's earnings and yahoo _should_ have owned
it.

(2) Scott is talking about ditching rmx and apt. Pray tell, what the hell is
he going to run Y's business on, and why is it going to be any cheaper if
they're paying for that software from someone else?

(3) They gave away search, and decrease market share and search rev every
quarter. Golf clap.

------
pyre
This is a little meta, but am I the only one that feels a little weird up-
voting headlines that are bad news? It sort of feels like I'm saying, "2000
job cuts? +1 That's what I like to see!"

Also, it's a little weird to be reading a piece about Yahoo, under a Yahoo
domain that talks about Yahoo in the third person (e.g. "Yahoo! today
confirmed...", a whole section titled "About Yahoo", etc).

~~~
pacaro
Don't think of it as 2000 job cuts, think of it as 2000 prisoners set free.

Inertia can be a difficult force to combat when working for a large company.
From personal experience, being layer off, or having a project cancelled, is
the ultimate incentive to find something better.

Of course this is stressful, and no severance package makes much difference to
the stress of a real human being with responsibilities and bills to pay, but I
do believe that the upside is significantly bigger than the downside

~~~
courtewing
I don't think that is a fair assessment of the situation. While some people
may be in a position where getting laid off from their job is a welcomed
incentive to pursue bigger and better things, there are also those people that
rely on that steady income to pay their bills and keep their families clothed,
fed, educated, and healthy.

I also want to say, although I don't mean to imply that this was your personal
assumption, that not every person working for a technical company in the
valley is a risk taking entrepreneur. Some people just like to program.

~~~
5teev
I expect they're also targeting a lot of senior (read: high-salary) employees
who are more likely to be the family bread-winner types. (Although for legal
reasons Yahoo! will go to great pains to point out that they are not in any
way targeting older employees.)

------
riordan
I don't say this to be snarky, but I will say that this post about yahoo is a
link to yahoo's press release portal aggregating third party press releases
kind of indicates where they're going.

Yahoo News is still the top news site. Yahoo business/finance is still among
the strongest financial properties. The good news is that Yahoo's not going
anywhere. The bad news is they're not going anywhere.

~~~
kristianc
Really? Top three stories on Yahoo News UK right now are "Driver survives
200ft truck plunge", "Labrador 'adopts' abandoned duckling" and "Flying car
cleared for takeoff" [1]

By what metric exactly is Yahoo News still the top news site?

[1] <http://uk.news.yahoo.com/>

~~~
byrneseyeview
_By what metric exactly is Yahoo News still the top news site?_

ComScore. Yahoo gets an enormous amount of traffic: Alexa also considers Yahoo
as a whole the #4 site (behind Google, Facebook, and Yahoo). And Y recently
hired a White House correspondent ([http://news.yahoo.com/yahoo-hires-first-
white-house-correspo...](http://news.yahoo.com/yahoo-hires-first-white-house-
correspondent-150334586.html)) and has made some other fun hires in the
reporting space.

My friends who work in tech don't visit Yahoo. But my extended family in the
Midwest sure does!

Full disclosure: I work at Y, but definitely don't speak for Y. If you have
ComScore access, you can double-check the "#1" stat I cited.

~~~
ojbyrne
"Alexa also considers Yahoo as a whole the #4 site (behind Google, Facebook,
and Yahoo)"

From looking at Alexa, I believe your second "Yahoo" should have been
"YouTube."

~~~
byrneseyeview
You're right. The "edit" button has expired.

------
Tossrock
Well, I just lost one coworker and my boss, both of whom were good people and
good workers. I think this seals my decision to move on; I only really came to
work here because I did internships and felt like I owed it to my boss to put
in a year or two... but if she's gone, then I've got no reason to stay.

Anyone looking to hire in the Bay?

edit: make that two coworkers

~~~
earl

       Anyone looking to hire in the Bay?
    

Are you kidding me? Easier to make a (short) list of who _isn't_ hiring in the
bay right now. If you want to work on hadoop / clusters / ad tech / rtb, send
email to ehathaway at quantcast and I'll send your resume to our internal
recruiters. I am, btw, an engineer, so feel free to ask any question that
isn't directly covered by my nda and I'll answer or tell you I can't.

~~~
sounds
earl's profile page does this right: his email is in his "about" section.

Since this will probably stay at the top of the "looking for work" comments,
here's a quick note -

Please put your email info in the "about" section of your user profile.

* Unless you're like me, and don't want to publicize your email.

------
plinkplonk
The CEO, Scott Thompson is apparently leaning on a group of management
consultants from Boston Consulting Group to come up with a turnaround plan and
these firings are apparently the result.

Do CEOs really ask outsiders for ideas on how to run/turn around a company? I
am in the wrong profession! I wouldn't mind dispensing advice on how to do
things I have no experience in doing, all the while pulling in 300+ $ an hour.
Somehow I can't visualize (say) Steve Jobs outsourcing thinking and decision
making.

The closest thing I've seen in software is a couple of instances of bringing
in agile methodology consultant/book author types to save failing projects.
Those didn't work out well either.

~~~
rxin
IBM was turned around by a formater McKinsey consultant, Louis Gerstner.

~~~
derroboter
Was it? Or rather _is_ it? Any details?

~~~
fennecfoxen
They've certainly "turned around" where it matters to the company:
[https://www.google.com/finance?client=ob&q=NYSE:IBM](https://www.google.com/finance?client=ob&q=NYSE:IBM)

------
anonymousYahoo
Yahoos –

Today we are restructuring Yahoo! to give ourselves the opportunity to compete
and win in our core business. The changes we’re announcing today will put our
customers first, allow us to move fast, and to get stuff done. The outcome of
these changes will be a smaller, nimbler, more profitable Yahoo! better
equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our
business and we will continue to actively consider all options that allow
Yahoo! to put maximum effort where we can succeed. As part of this process, I
believe we have to focus to win in a select group of core businesses globally:

· Core Media and Communications: Our content, media, and communications
experiences must be best in class. That includes getting today’s core
properties right and innovating on a next generation of great product
experiences across all screens.

· Platforms: We must make our core platforms and systems a genuine strength
for Yahoo! – platforms that we can really leverage to support our massive
scale, drive the deepest personalization, and boost speed to market.

· Data: Our massive data sets must become a genuine competitive advantage for
Yahoo!. We have to unlock the value in our data to allow us to really
understand our 700 million users, encourage and win their engagement and
trust, leverage everything they do with us to more fully personalize their
experiences, and to give our advertisers the immediate insights they are
rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying
resources to our most urgent priorities. Our goal is to get back to our core
purpose – putting our users and advertisers first – and we are moving
aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate
jobs, which means losing colleagues and parting with friends. Today, we will
begin the process of informing employees about these changes. As part of that
effort, approximately 2,000 people will be notified of job elimination or a
phased transition. We value our people and for those who will be leaving, we
thank you for all you have contributed to Yahoo!. We will treat all of our
people with dignity and respect, providing resources to help manage through
their transition.

Change is never easy. But the time has come to move Yahoo! forward
aggressively with increased focus and accountability. Our values have always
been about treating all Yahoos with dignity and respect, and today is a day to
embrace those values. This is an amazing company with exceptionally talented
people and I know we will all do our best to encourage each other through this
difficult period of transition.

Thompson-Scott.png

EDIT: The mail sent to us by our respected CEO Scott Thompson.

~~~
dododo
re: Data.

not sure how they are going to unlock their data as they cut back on y! labs.

<https://twitter.com/#!/smolix/status/180064462294876162>

~~~
seldo
Yahoo's research divisions do great work that basically never makes it out
into the wider company past the prototype stage. It is an awesome, wonderful
waste of money.

~~~
xp84
Wow. I had no idea Yahoo! had their own "Bell Labs." Neat. (Or perhaps,
tragic)

~~~
gcb
Two layoffs ago they cut 'brick house' which was a hands-on innovation cell,
purveyors of live.yahoo.com (a 2007 version of chatroullete with many more
features and 5-way video chat) and fire eagle, the GEO standard, and other
nice stuff.

man, it's depressing to count a company history in 'layoffs'

~~~
simplekoala
5 way video chat == Google hangouts?

~~~
drgath
Yup. They are similar. Yahoo! Live was pretty awesome.

------
etrain
Always sad to hear about that many people losing their jobs - but, at least
the technical job market is as strong now as it has been in a decade.

With a workforce at the end of last year of >14,000, this is clearly a
substantial reduction in headcount, but the company isn't exactly "closing up
shop."

I'm curious about what areas will be hardest hit by these layoffs. Really good
stuff has been coming out of Yahoo research over the last several years, and
it would be a shame to see that investment pulled off the table.

------
zippie
Perhaps the crux of the issue are the problems PG observed at Yahoo! over a
decade ago are still an issue today.

As long as PG's observations hold true I think Y! will have a difficult time
turning itself around.

PG's canonical article about Y!: <http://www.paulgraham.com/yahoo.html>

------
chojeen
Not a good day to be a contractor and the least senior person in your group.
If anyone has been through corporate layoffs before, do you know whether they
usually target the most senior people (because they're the most highly
compensated) or the least senior (because they're easily replaceable)?

~~~
VengefulCynic
There are essentially two kinds of layoffs: "We're getting rid of Division X
and everyone in it" and "We need to reduce expenses and so we're laying off
people." In this case, it sounds like a little bit of each.

There are entire companies dedicated to executing (pardon the pun) layoffs
"correctly" and there are as many ways to do it as there are managers, but
they essentially fall into three categories: cost-based (get rid of the most
cost), skills-based (get rid of the people who don't have skill X that we
totally need) and performance-based (get rid of the people who suck). Most of
what you're talking about sounds cost-based, in which case there's two
philosophies: get rid of the most senior people who charge the most (hello,
age discrimination lawsuits) and get rid of a lot of junior people whose
productivity is lower and expect the senior people to pick up the slack.

And yes, I have had the privilege of working in a Fortune 500 company and
helping put together a layoff list - worst job of my life.

~~~
_delirium
I haven't run into this in person, but my dad worked for years at a BigCo
engineering firm that had multiple rounds of layoffs, and they seemed to use a
fourth strategy: try to get as many volunteers as possible by offering some
severance packages, and just take whatever random assortment of people said
yes. The theory was that that was the way to reduce headcount with the least
impact on morale, since nobody was actually being fired. In practice some
people were strongly hinted that it was in their best interests to take the
package, though. It also tended to be de-facto biased towards getting rid of
the older/more-expensive employees (who would just take early retirement)
without overtly singling them out.

------
raganwald
Gruber nailed it: “This rings a bell, circa 2008”

 _the steps we are taking are not easy for us as a company, but as we become
more fit as an organization, decision-making will be faster and it will be
easier for us all to get more done and stay focused on our strategy._ —Jerry
Yang

[http://allthingsd.com/20081021/jerry-yangs-complete-memo-
to-...](http://allthingsd.com/20081021/jerry-yangs-complete-memo-to-the-yahoo-
troops-about-layoffs/)

~~~
Isofarro
that was the "no sacred cows" themed layoff, IIRC.

------
sriramk
I'm an ex-Yahoo. I have friends there and have sympathy for how hard today
must be.

But I strongly think this is the right move for the company. They had way too
many people, more than what they need/afford and were the cause of much
overhead. Of course, it all depends on whether they're laying off the right
projects/people.

------
dmfdmf
I hope they fired the marketing experts who made the decision to have flying
cars and zooming coke cans in my face and disrupting the home page. What a
joke. Yahoo was my home page for years and when they started that non-sense I
switched to duckduckgo.com and haven't been back.

------
joelmaat
They were trying to hire me right before the news hit. They have a lot of
nerve. I am dumbfounded. Good thing retaliatory managers have left me without
references and I would bomb out of the process for that reason, rather than
for a lack of technical ability.

In other news, I have made a string of bad decisions as far as who to work
"for." I should do something about that. Perhaps I should let someone (more
capable) decide what I do next.

Sometimes its good to have no choice but to follow your dream, all else and
all other's (face saving, arrogant) bullshit aside.

------
bickfordb
Savings of $375M annually would imply an average of $187500/ employee. Does
this seem high to anyone else?

I can't imagine all of these employees are cream of the crop
engineers/managers.

~~~
Tossrock
An employee costs more than their salary; there's health insurance/benefits,
payroll tax, IT+support costs, etc.

------
Lascar
Dear Yahoos, you might have been let go, but you should be proud:

<http://www.youtube.com/watch?v=mh4jvDsNtEE>

------
tumanian
Devs are fine. We lost all our QE.

------
jreposa
Any idea if they're laying off software devs? They're still in high demand
here in NYC.

~~~
dpark
Of course they will be. They aren't going to cut exclusively from sales and
service engineers.

------
s_kilk
Random anecdote: A few days ago I was heading to Dublin Airport when I spotted
the Yahoo! logo covering the entire face of very large building. First
thought: "That's pretty cool", Second Thought: "Wow, those guys are still
going?"

~~~
cpeterso
Yahoo recently retired their famous neon billboard that had been in downtown
San Francisco for many, many years. The billboard was ugly, but it was a sad
sign of the times when it came down. :\

[http://news.cnet.com/8301-13772_3-57327029-52/san-
francisco-...](http://news.cnet.com/8301-13772_3-57327029-52/san-francisco-to-
lose-beloved-yahoo-billboard/)

~~~
xp84
it wasn't ugly :(

~~~
prodigal_erik
We can agree it was objectively very … purple.

[http://www.thesfegotist.com/editorial/2011/november/16/end-e...](http://www.thesfegotist.com/editorial/2011/november/16/end-
era-yahoo-billboard-comes-down)

------
njharman
I think I might have known at one point, but what does yahoo actually do? I
can't think of a product / service. Search?

Irellevant is an understatement.

------
obilgic
Can someone explain "sophomore Computer Science and Business major" (me), why
Yahoo's stock is going up with these news? (Currently it is +0.77%)

Thanks

~~~
smackfu
It's because the fundamental issues causing the layoffs should already be
priced into the stock (due to poor earnings reports and such). So layoffs are
considered a good response to the fundamental issues and cause a price
increase.

------
Lascar
How ironic is that ?

<http://www.youtube.com/user/yahoo?ob=4>

------
sad_panda
Sorry guys. :(

------
fatcutter
looks like a lot of fat is being cut out.

------
neya
Well, Expected.

------
carguy1983
HN readers should see this as an opportunity to hire experienced, qualified
developers, systems engineers, and marketing people. Possibly for salaries
lower than what otherwise would be the norm, especially in non-Bay Area
markets.

~~~
Lascar
"Qualified developers" ? You must be kidding, I worked at yahoo a few years.
It is very true that I have met a few outstanding engineers over there,
however, the average engineering skill level right there was the lowest I have
ever seen.

