Tech giant to sack 15% of workforce in cost-cutting move despite beating earning estimates

folarin okunola

February 3, 2016 5:33 PM

Yahoo posted quarterly revenue of $1.27 billion (versus $1.18 billion in the year-earlier period) as against Wall Street’s expected revenue of $1.19 billion, according to Thompson Reuters.

Yahoo CEO, Marissa Meyer.

Tech giant, Yahoo, has said it will cut 15% of its workforce, or about 1,600 jobs, announcing that it is exploring “strategic alternatives” in the process.

According to a report by Variety, the company made the announcements while reporting financial results for the fourth quarter of 2015 that beat analyst projections for top-line revenue.

Yahoo posted quarterly revenue of $1.27 billion (versus $1.18 billion in the year-earlier period) as against Wall Street’s expected revenue of $1.19 billion, according to Thompson Reuters.

“This is a strong plan calling for bold shifts in products and in resources,” CEO Marissa Mayer said in a statement. “The plan announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers and partners.”

READ: Spin-off or sale? Turnaround plan in focus as earnings awaited

The Variety report further reveals that Yahoo will focus on three platforms globally: Search, with an emphasis on mobile search; Mail; and Tumblr.

Yahoo said it plans to reduce its workforce by roughly 15% and shut down five offices (in Dubai, Mexico City, Buenos Aires, Madrid and Milan) as part of its cost cutting measures. The company said it expects most of the restructuring changes will take place in in the first quarter of 2016.

According to the company, the cuts will result in savings in short term operating expense of $400 million annually.

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