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This Feb. 19, 2015 photo, Yahoo President and CEO Marissa Mayer delivers the keynote address at the first-ever Yahoo Mobile Developer Conference in San Francisco. Yahoo and Microsoft will keep working together on search, but Yahoo is getting more control over the how its search page looks and works. An agreement announced Thursday, April 16, 2015 extends a search partnership that Yahoo Inc. and Microsoft Corp. forged in 2009 while they were being led by different CEOs. Yahoo had an option of ending the relationship. The two are trying to chip away at Google’s dominance of Internet search. (AP Photo/Eric Risberg)
AP Photo/Eric Risberg
In a tough spot.
DOWNSIZING

Yahoo will reportedly cut 10% of its staff

By Alice Truong

With Yahoo struggling to turn itself around, the flailing company is reportedly planing to lay off at least 10% of its workforce.

Business Insider reports that the cuts will likely happen in the first quarter and could occur as early as this month. The layoffs will be felt company-wide, but are expected to largely impact Yahoo’s “media business, its European operations and its platforms technology group,” the site reports. Quartz reached out to Yahoo, which declined to comment.

The Sunnyvale, California-based company had a rocky 2015, with its stock ending the year down 34%. To appease investors, the company initially planned to spin off its 15% stake in Chinese ecommerce giant Alibaba, but ultimately scrapped the plan when it became unclear if the transaction would go through tax-free.

Under pressure from activist shareholder Starboard Value, Yahoo said in December that it would instead attempt a complicated reverse spinoff, keeping its Alibaba stake and spinning off its core business. Since the announcement, another activist investor, Eric Jackson of SpringOwl Asset Management, has proposed an alternative plan that includes bringing on a new CEO to replace Marissa Mayer, laying off 75% of Yahoo’s staff, and cutting back on lavish perks. On Jan. 6, Starboard CEO Jeffrey Smith also called for leadership change at Yahoo, though he did not explicitly name Mayer.

Though a 10% cut in staff would not be nearly as drastic as what Jackson has advocated for, the move would signal that the company is paying attention to his demands. SpringOwl isn’t a major shareholder, but Jackson has said he was willing to wage a proxy fight.

Jackson’s recommendations also include selling Yahoo’s Sunnyvale campus, which he estimated to be worth $1.5 billion to $1.8 billion. The Silicon Valley Business Journal reported in December that Yahoo was shopping for a buyer for its 48.6-acre development site in Santa Clara.

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