Yahoo Admits Overpaying for Tumblr; Will Cut 15% of Workforce

Just one day after Google overtook Apple as the world’s most valuable company, OG search engine Yahoo’s future continues to look questionable, as CEO Marissa Mayer announced Q4 2015 earnings.

The internet company will reportedly lay off some 1,500 jobs, close offices, and explore selling off assets in an attempt in to “accelerate Yahoo’s transformation”, according to Mayer. One of the assets the company may look to dump is blogging platform Tumblr, which Yahoo acquired back in 2013 for $1.1 billion. Yahoo admitted today overpaying for Tumblr, writing down its total value by more than $230 million. 

The Yahoo 2016 layoffs should come as little surprise; as we reported back in December, the company announced it would seek a “reverse spin-off” of its core internet business at some point this year, as ridding itself of its stake in Yahoo Japan & Alibaba would not necessarily come without tax penalties, as the company previously thought.

How bad is the situation at Yahoo’s core internet business? Even if it were sold today, analysts suggest the company is worth less than zero dollars.

How Mayer has been allowed to remain as CEO at Yahoo for this long is beyond me. Since being appointed the position in 2012, Mayer has invested $30 billion in 40 companies—despite this, revenue has shrank nearly her entire reign, while the only boost in stock price came from Alibaba’s IPO.

By the end of 2016, Yahoo anticipates having a workforce of around 9,000, which is over 40% less than what the company had back in 2012.

One Pingback/Trackback