Earlier today news broke that Yahoo will be firing 2,000 employees as part of a restructuring plan. The number is huge. However, the lay-off was expected. Kara Swisher over at AllThingsD wrote about Yahoo’s restructuring plans. According to Swisher’s story, Yahoo hired the Boston Consulting Group to help Yahoo with the restructuring. The company has been through some seriously bad times. THe top management has been in the news for all the wrong reasons. Yahoo’s current CEO Scott Thompson sent out an email confirming the lay-offs and explaining what Yahoo will focus on in the future.
Search is clearly no longer Yahoo’s game. Microsoft’s Bing powers Yahoo’s search and Yahoo pays 12% of its search revenue to Microsoft. The company has spread itself into areas it couldn’t generate any money from. Thompson hopes to fix this and has outlined three key areas for Yahoo to focus on:
Core Media and Communications
For a while Yahoo is being considered as a media company. Back in 2006, Om Malik wrote about Yahoo’s ability to aggregate content and monetize it. Yahoo has a few interesting content apps for the iPad too, if the company can leverage new content consumption devices to their advantage, they can regain some of their lost brand identity.
While Yahoo is being considered as a media company, they use technology for their operations. The company’s engineers have been working on newer web platform that can be used by independent web developers to tape together rich interactive web services. Mojito, Manhattan and Yahoo Pipes are some examples. Empowering developers to come up with their own web services using Yahoo’s platforms and Yahoo’s data is a pretty good way of getting the company back on track.
Thompson hopes to use data mining to understand Yahoo’s users and find ways to create value out of their massive data repository collated over the years.
In his email to employees, Thompson stressed on his strategy to regroup and concentrate resources towards these areas.
We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose – putting our users and advertisers first – and we are moving aggressively to achieve that goal.
The layoffs and restructuring is expected to save Yahoo $325 Million.