Yahoo said last month it would pursue a tax-free spinoff of the core Internet business, which could take at least a year. Picture: A Yahoo logo is pictured in front of a building in Rolle, 30 km (19 miles) east of Geneva, in this file picture taken 12 December, 2012.Reuters
Yahoo is planning to lay off about 10% of its employees as part of its proposed reorganisation, which could begin as early as this month. More than 1, 000 employees are expected to be sacked.
The layoffs would affect the Internet company’s media business, platforms-technology group and European operations, Reuters reported.
The company’s activist investor Starboard Value LP has been increasingly pressuring the company to remove Yahoo Chief Executive Officer Marissa Mayer. Starboard has indicated that a proxy battle is approaching. “A team is working on it and they want to do it this quarter,” a source told Business Insider.
Starboard, which has a 0.75% stake in Yahoo, has been seeking changes in the company since 2014. It has reportedly urged the company to separate its Asian assets and auction the core business.
“Despite over three years of effort and billions spent on acquisitions, the management team that was hired to turn around the Core Business has failed to produce acceptable results, in turn causing massive decline in profitability and cash flow. It appears investors have lost all confidence in management and the board,” Starboard Value LP wrote in a letter released on Wednesday, according to CNBC.
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Despite facing pressure from Starboard to separate its Asian shares, which include stake in Chinese e-commerce company Alibaba Holding Ltd, and Yahoo Japan Corp, Yahoo has resisted the change and instead wants to create a new unit from existing tax units to ensure that there are no tax implications, Reuters added.
According to reports, Yahoo had consulted McKinsey & Co in November 2015 to help them reorganise their core business.