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Report: Yahoo CEO Plans Major Restructuring, Layoffs
Report: Yahoo CEO Plans Major Restructuring, Layoffs

By Jennifer LeClaire
March 5, 2012 1:54PM

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AllThingsD reported Yahoo had hired Boston Consulting Group to help the company focus on growth areas and prepare for a profitable future. Yahoo CEO Scott Thompson has already made some other major moves since he came on board, including putting on hold talks about selling Yahoo's Asian assets and suing Facebook for patent infringement.
 



Yahoo CEO Scott Thompson is readying a major restructuring of the company he just took over. That restructuring may include laying off thousands of people.

So says a report in The Wall Street Journal's AllThingsD blog. Reporter Kara Swisher cites multiple sources inside and outside the company in her story, which suggests these sweeping changes could be announced by the end of March and focus on Yahoo's large products organization and other lagging divisions.

"This is yet another reorganization for Yahoo. It's far from clear whether these cuts and any related restructuring will help get the company back on the path toward competitiveness and growth," said Greg Sterling, principal analyst at Sterling Market Intelligence.

"It's one of those I'll believe it when I see it situations. Investors arguably want to see some 'shock therapy.' But how many times can you shock patient before killing it?"

Looking for Investors

Yahoo could not immediately be reached for comment, but AllThingsD reported Yahoo had hired Boston Consulting Group to help the company focus on growth areas and prepare for a more profitable future. Thompson has already made some other major moves since he came on board in January, including putting on hold talks about selling Yahoo's Asian assets and suing Facebook for patent infringement.

The tech industry can take some hints from Yahoo Chairman Roy Bostock's letter to shareholders on Feb. 7. In it, he discusses some of the actions Yahoo is taking to increase shareholder value and position the company for growth.

"We have engaged with potential investors and reviewed proposals concerning an equity investment in the company, although at this time there have not been any proposals which have been deemed by the committee to be attractive to our shareholders," Bostock wrote. "We are also in active discussions with our partners in Asia regarding the possibility of restructuring our holdings in Alibaba Group and Yahoo Japan. The complexity and unique nature of these transactions is significant."

Building a New Board

Yahoo is also working to build a new team of independent directors with the expertise and perspectives needed to drive innovation and growth going forward. Three directors, including Bostock, have volunteered not to stand for re-election at the next shareholders' meeting. Yahoo also elected two new independent directors: Alfred Amoroso and Maynard Webb. Amoroso served as president and CEO of Rovi Corp. until Dec. 2011. Webb is the chairman of LiveOps.

Meanwhile, Yahoo is pushing ahead with its original content strategy. Yahoo on Monday launched Small Business Advisor, a new media property with personalized news, advice and tools for entrepreneurs. Released in beta in late 2011, Yahoo Small Business Advisor aggregates Yahoo original articles plus content from leading business publishers. The site reached 4 million page views just three months into beta. Yahoo on Monday also launched new comedy shows featuring Seth Morris, Mike O'Brien and Ken Marino to the comedy channel on Yahoo Screen.
 

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