Yahoo, under pressure to do something dramatic to turn itself around, is expected to announce along with its fourth-quarter results Tuesday a cost-cutting proposal that involves closing down units and layoffs of up to 15 percent of its workforce.
The Wall Street Journal reports that the Sunnyvale company and CEO Marissa Mayer will unveil a plan to try to fight off an investor uprising. Multiple investors have called for a sale of the company, for Mayer to be fired, for the board to be replaced and more.
One of those investors is SpringOwl Asset Management, which last year published a 99-page slide presentation to turn Yahoo around.
Eric Jackson, managing director for SpringOwl, isn t optimistic about the plan that the Journal reports Mayer is going to unveil Tuesday.
For one, Jackson told SiliconBeat in a telephone interview Monday morning, the 15 percent workforce reduction would amount to about 1,700 job cuts. SpringOwl has called for Yahoo to cut 9,000 workers; the company s most recent official headcount is 10,700. It had about 14,000 employees when Mayer became CEO in 2012.
The bigger problem is Marissa Mayer is still going to be the CEO, Jackson added. While Yahoo investors have differences in opinion about what Yahoo should do next, he says he has yet to talk to an investor who thinks Mayer has done a good job.
Meanwhile, the New York Post reports that Starboard Value, another investor who has been on Yahoo s case for a while and has threatened a proxy fight, isn t keen on Yahoo s reported plan, either, saying that anything short of we re going to explore selling the core business is not enough.
Another investor, Canyon Capital, has also called for an immediate sale of Yahoo s core business, something Yahoo is not known to be exploring. In December, Yahoo said it would explore spinning off its core business instead of its Alibaba stake, but said it would continue to work on a turnaround plan.
With so many investors unhappy about how the company has done under Mayer, Jackson said he expects Yahoo would lose a proxy fight.
SpringOwl hasn t disclosed the amount of its stake in Yahoo. Starboard owns less than a 1 percent stake. Canyon Capital owns a 1.1 percent stake.
Yahoo, which last week confirmed that it s shuttering operations in Mexico and Argentina, is expected to report fourth-quarter profit of 13 cents a share on $1.19 billion in revenue, compared with profit of 15 cents a share on sales of $1.23 billion in the year-ago period, according to analysts surveyed by Thomson Reuters. The Journal also says some analysts expect Yahoo s earnings before interest, taxes, depreciation and amortization was $900 million in 2015. That would be the first time that has fallen below $1 billion in at least six years.
Yahoo shares are up slightly today, less than 0.25 percent, to $29.58.
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