Let me first wish all readers and regular followers of Brajeshwar a very Happy New Year, 2011. 2010 could have been a bad year for many and here is hoping for a better start in 2011. A bad year it was for many at Yahoo! too.
Yes, Yahoo! has done it again. In less than 4 years the company has gone ahead and issued the pink slip to as many as 2,700 employees. History says that the Sunnyvale, California based company had sacked around 1,400 jobs in the year 2008 during the time of recession and then up to 700 job holders were shown the gate in the very next year 2009.
Following this is yet another lot of 600 people who now have to look for other job opportunities. The downsizing saga continued with Yahoo! chopping of 600 jobs during December mid-month of 2010, but the number supposedly higher than the real deal. There were speculations of at least a 20% layoff which in real-time has reduced to a 4% layoff.
Although there were reports of the fact that the layoffs would majorly be in the Yahoo! products group, which builds Web properties like the company’s popular news, sports and finance pages, as well as its widely used e-mail service, there is no definite news that the downsizing has taken place in this particular division as yet. Rumors doing rounds suggest that the head of the products group at yahoo Blake Irving who moved from Microsoft to Yahoo! has his plans cut out and plans to reduce operational costs by cutting jobs of up-to 20% in his division.
Now let’s move on to a more sane discussion and try to understand the logic behind such downsizing and see if this kind of strategy has really helped Yahoo! over the past. Understandably and a very obvious reason for the layoffs is to cut down on costs. Secondly, the company wants to ensure that it aims at optimized downsizing i.e., an effort to chop jobs that aren’t as productive as they have to be. Yahoo! is also looking at re-inventing itself in order to compete with internet rivals Google. A Yahoo spokesperson said “the company will continue to hire on a global basis to support our key priorities and laid-off employees will receive severance packages and outplacement services”. This meaning that the company does not always endorse the idea of downsizing.
Carol Bartz, Yahoo!’s CEO has her work cut out. After having shown the gate to as many as 2000 employees and more, Bartz now has to ensure that she does not put a step wrong in the future. Her plan is to streamline the company and drive its focus around content again. To turn Yahoo! into what it was a few years ago Bartz says she needs a some years time. The company under her leadership has surely cut costs and also cracked a deal with Microsoft’s Bing. So it is not a bad idea to downsize but there needs to be enough care taken to ensure that there are no hiccups like the idea of arranging for severance packages and outplacement services, improving business deals, etc.
Though 2010 has proven to be a mix of good and bad for Yahoo! there could be some respite for the company in store in the year 2011.