Yahoo! Inc (NASDAQ:YHOO) is expected to disclose its planned cost-cutting measures including job cuts and business closures, according to the Wall Street Journal based on information familiar with the matter.
The report indicated that the company plans to reduce its work force by 15% and exit some of its business units. Yahoo is expected to announce its decision after releasing its financial results for the fourth quarter.
Earlier last month, it was reported that Yahoo employees are preparing themselves for massive layoffs, which will affect its media business, European operations, and its platforms-technology group. Based on the company’s website, it has 11,000 employees as of June 30.
Yahoo to close offices in Latin America
Last week, a spokesperson for Yahoo confirmed reports regarding the company’s plan to close its offices in Latin America particularly in Buenos Aires, the capital city of Argentina; and Mexico City, the capital of Mexico.
“Yahoo is focused on maximizing growth. With that in mind, we communicated to employees in Argentina and Mexico that we will be closing our offices there. Our impacted employees will be treated with respect and fairness through this transition.”
Despite the closures, the company still considers Latin America as an important region for Yahoo, and plans to continue to invest in the people and products in the region. The company maintains a vital team in Brazil and Coral Gable, Florida, according to the spokesperson.
Activist investor demands changes at Yahoo
Activist investor Starboard Value increased its pressure to the Board of Directors of Yahoo to implement significant changes in the company to achieve growth and profitability.
In a letter to the company’s Board, Starboard Value expressed its frustration on Yahoo’s leadership because of core business “failed to deliver acceptable results” despite its efforts and billions of dollars spent on acquisitions over the past three years.
The activist investor urged the Board to be open-open minded in assessing and comparing a stand-alone spinoff and restructuring of the core business. Starboard Value also indicated that there are credible parties interested to buy the core business.
Earlier in January, it was reported that Yahoo was reconsidering its strategy for the core business following the demands of Starboard Value. The management was considering a sale of the core business instead of its previously announced plan to spin it off into a separate, publicly-traded company.
