Yahoo to look at strategic alternatives, cut jobs as it pursues spin-off
By Deborah M. Todd and Abhirup Roy
(Reuters) - Yahoo Inc (YHOO.O: Quote) said on Tuesday it would consider "strategic alternatives" for its core Internet business and cut about 15 percent of its workforce, even as it continues with its plan to revamp the business and spin it off.
The announcement is the strongest sign yet that the board and Chief Executive Marissa Mayer may be willing to sell the struggling Internet business - essentially websites, email and online search - under growing pressure from impatient shareholders.
In an interview with Reuters, Mayer said the company will entertain offers as they come but its first priority is the turnaround plan.
If it receives an offer this year, it was unlikely that the transaction would be completed before the 9 to 12-month timeline projected for the spin-off, she said.
"We would obviously engage but I think the one thing we're trying to do is set our shareholders' expectations in terms of complexity," Mayer said.
The planned restructuring announced on Tuesday includes the closure of offices in five locations, a paring down of its products, shifting more resources to mobile search, and the sale of some non-strategic assets such as real estate and patents.
Investors were not immediately impressed, sending Yahoo shares down 1.2 percent after hours. They have now fallen 36 percent over the past 12 months.
"We believe the strategic plan does not fully address the core issues which have destroyed shareholder value - poor capital allocation, bad strategic partnerships, out of control spending and a bloated workforce," said New York-based SpringOwl Asset Management, a shareholder which has called for changes at the company. Continued...