ADOTAS – It’s not going to be a real merry holiday season at Yahoo. While TechCrunch’s Michael Arrington first put the layoff figure at 20% of Yahoo’s staff, Kara Swisher at AllThingsD reports that 10% of the product group is going to get chopped next month.
That’s 10% of 6,500 employees — and while 650 is no small number of pink slips, it’s a lot lower than TechCrunch’s estimate of 2,800 cuts out of all 14,100 employees. Yahoo put out a statement calling TechCrunch’s reporting “misleading and inaccurate,” but Arrington is sticking by his guns — or rather his anonymous sources.
Layoffs have been a seasonal thing at Yahoo — 700 employees were shown the door in spring 2009 shortly after CEO Carol Bartz took the reigns and the Search Group took a hit this summer before the Microsoft search integration. After these most recent staff cuts, Yahoo reportedly will outsource lost U.S. development and operations jobs to Bangalore and other locations.
Axing 10% of the product team is not going silence the ongoing media and investor cries that Yahoo is suffering because Bartz’s lack of innovation. And of course Arrington had to make a dig at her reported $39 million in total compensation in 2009.
Let’s take a closer look at that number: that $39 million includes unrecognized stock options allowing her to purchase stock at prearranged prices when it meets certain targets. Considering the slump Yahoo’s stock has been in (14% dip this year), I doubt any of those have been met. That lump sum also includes $10 million in restricted stock and cash used to lure her away from her position at Autodesk, a place I’m sure she’s missing right now. According to a Yahoo spokesperson, stock she buys cannot be sold until 2013 unless circumstances change — e.g., a CEO switch.
So, no, Yahoo did not give Bartz an oversized check for $39 million check last year — her actual salary was $5 million, which makes my paycheck look pretty paltry, but it’s not a ridiculous amount for a CEO.
However, the addition of former Fox Interactive bigwig Ross Levinsohn in the position of EVP for the America probably means Yahoo is going to let Bartz ride out her contract and decline to renew it. It’s not kicking her to the curb like many loudmouthed investors want, but Levinsohn will likely be the strong no. 2 who transitions into the captain’s chair.
It seems like Bartz has taken a lot of flack for cofounder, former CEO and board member Jerry Yang’s massive missteps. Bartz’s first (and not-so-simple job) was to streamline a bloated company that was sprawling aimlessly — a goal she’s accomplished. The tech jackals like to snort, “Yahoo has no idea what kind of company it is,” but I can tell you it’s a massive Internet media company and a portal that features mail as well as integrated social networks.
What’s your “elevator pitch” for Google? It’s almost like the Internet-based version of Yamaha, which makes everything from jet skis to acoustic guitars. When is the Google-branded line of sneakers coming out? (On a side note, I did receive a pair of YouTube tube socks in my 2010 CMJ Festival shwag bag.)
The search deal with Microsoft allowed Yahoo to withdrawal from its search war with Google and the company has made a series of smart acquisitions just in the last year, including dynamic ad creative specialist Dapper and content resource Associated Content. Despite the sinking stock, Bartz has kept the ship afloat during rough times — Yahoo’s still bringing in ad revenue, which can’t be said for rival portal AOL.
Some will argue you have to fix what’s broken before you can work on something new, and some will say you can mend and create at the same time. Bartz has simply lost the public image contest, though I think she was handicapped from the start.
Then again, maybe I just like rooting for the underdog — yet after suffering for so long through various versions of Windows, I just can’t get into Microsoft’s corner….
