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.