Yahoo CEO Marissa Mayer today announced the digital media company’s decision to reduce its workforce by roughly 15 percent or 1,700 jobs in Q1 2016 to save more money.
Yahoo made a loss of $4,359 million in 2015 against profit of $7,522 million on annual revenues of $4,968 million ($4,618 million).
Yahoo will also close down five offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan in Q1 2016.
Following the restructuring, Yahoo will have approximately 9,000 employees and fewer than 1,000 contractors by the end of 2016. Its workforce will come down by roughly 42 percent as compared to 2012. Yahoo will save $400 million annually towards operating expense.
The US-based technology major also announced new strategies focusing on the following:
# Improve consumer and advertiser product quality and grow daily active users (DAUs)
# Drive growth in revenue realized through Mavens (mobile, video, native and social) to $1.8 billion this year
# Improve profitability to reach an adjusted EBITDA run rate of approximately one billion dollars by the second half of 2016
# Reduce operating expenses by more than $400 million by the end of 2016
# Limit GAAP revenue impact of product and regional exits to approximately $100 million
# Explore non-strategic asset divestitures that, if consummated, could generate in excess of $1 billion in cash
Marissa Mayer, CEO of Yahoo, said: “We are 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.”
Yahoo will simplify its products. Yahoo will have three consumer products globally: Search, Mail, and Tumblr, and four verticals: News, Sports, Finance and Lifestyle in growth markets U.S., Canada, U.K., Germany, Hong Kong, and Taiwan.
Yahoo will shift focus to mobile search.
Yahoo will add more features to Mail, its communications product.
Yahoo will make more investment in the Tumblr and digital content in News, Sports, Finance, and Lifestyle.
Yahoo will make more investment in the Mavens with an emphasis on mobile. Mavens revenue exceeded $1.6 billion in revenue in 2015, a 45 percent increase. Mavens revenue in 2016 will be more than $1.8 billion.
In Q4, the company closed Yahoo Screen and shifted away from original content. In 2016, Yahoo will consolidate some Digital Magazines under one of its four core verticals, while others will be shut down.
Yahoo will also exit legacy products, including Games and Smart TV.
Yahoo will try to sell real estate, and other non-core, non-strategic assets to generate between one and three billion dollars in cash.