Jerry Yang to Yahooers: One in Ten of You Is Gone

Yahoo CEO Jerry Yang sent the email below to all Yahoo’ers at 2:20 pm PST Tuesday, after earnings were announced. Besides being all lowercase, as usual, he lets everyone know that the company will be letting 10% of employees go to help save $400 million in annual costs. Jerry Yang, of course, will not be among the layoffs.

The full email:

From: Jerry Yang [mailto:[e-mail]]
Sent: Tuesday, October 21, 2008 2:20 PM
To: [e-mail]
Subject: update

yahoos,

i feel it’s important for me to reach out to you after our earnings announcement, and before our all hands meeting tomorrow.

we as a company have been through a tremendously challenging year; and managing the increasingly turbulent global advertising climate has been an important focus for the last three months.

throughout the first three quarters of 2008, we have been balancing between investing in our top priorities, and managing our cost structure. beginning in september, with the help of Bain & Co., we initiated a series of steps to determine how we can become more efficient and productive as an organization.

we heard from you through the YEES survey, and through your suggestions on backyard, and we’ve identified many areas that we all feel we can improve upon. our productivity efforts, based in part on what we heard from you, will involve initiatives such as streamlining our organizational structure through reducing layers and increasing spans of control, and eliminating redundancies. longer term structural efficiencies include consolidating facilities, improving procurement, and standardizing our global technology platforms.

today as part of our q3 earnings release, we said that our goal is to reduce our current annualized cost run rate of roughly $3.9 billion by more than $400 million before the end of 2008. we are targeting non-headcount expenses wherever possible, such as facilities and outside services. however, because compensation expenses are the single largest part of our costs, we anticipate a reduction of at least 10% of our global workforce by year-end.

affected employees will be notified of layoffs in the next several weeks. we understand that hearing this news now creates uncertainty, but we are moving ahead in a way that balances speed with a clear focus on accomplishing what is necessary to set the organization up for long term success. going forward it will continue to be important for us to make the right decisions to keep our business efficient and strong.

having layoffs is very difficult, particularly in light of all we’ve experienced this year. but we don’t take these decisions lightly, and are committed to treating affected employees fairly, offering severance and outplacement services.

the steps we are taking are not easy for us as a company, but as we become more fit as an organization, decision-making will be faster and it will be easier for us all to get more done and stay focused on our strategy. these changes will also prepare us to better deal with the macroeconomic downturn. as with previous downturns, yahoo! continues to be a place where consumers turn for information and communications, and is an integral part of their internet day. as the global economy improves in the future, i certainly believe that we will be stronger and benefit from the actions we are taking now.

as always, i thank you for all you do as yahoos.

best,

jerry

Original post

Comments

[Hadrian:]

The Romans used to use to refer to this process of right-sizing 10% of their force as "decimation":

A group selected for punishment by decimation was divided into groups of ten; each group cast lots, and the soldier on whom the lot fell was executed by his nine comrades, often by stoning or clubbing. The remaining soldiers were given rations of barley instead of wheat and forced to sleep outside of the Roman encampment.

2008 Oct 22 10:01 AM

[yeahright.:]

this is a very very hard time for us....Yahoo comes looking for u to work for them now this.....and you have 2 wait 2 months to see if you are one of the unlucky ones....thats insane...I'm going to dive my husband insane with the wait....we are like everyone are struggling now with gas prices,grocery bills,3 kids, college, housepayments......out... placement....for writers they hired...yeah right....no such thing in the media.....and our guys travel for weeks and weeks in any given year following their sports beat....and Yahoo took pride that they beat ESPN.com's numbers month after month with only a quarter of a size of ESPN's staff...well....I guess Yahoo will lose that....man did they brag that they had much higher numbers with their Olympic coverage than the network that covered them....they even mentioned it in their 3q statement that came out yesterday.....my husband was hoping for two years that Google would start their own unique content....he lied in fear Yahoo would do this.....they have a whole group of writers which they hired away from newspapers,sports illustrated,etc...maki... tons of money in their division .......but the cuts are suppose to be across the board. These guys were all contractors....last yr we jumped for joy when they were made employees....we finally had benefits.....so the story is 2 weeks pay only for this group if they get pink slips am I'm sure they will......their contract yr wont count...."Merry Christmas"and a "Unhappy New Years"

2008 Oct 22 12:00 PM

[Al-USA:]

Yep, this "sucks". The average "working stiff" needing to pull a paycheck to make a living always gets the crumbs from the capitalist elites... And still Americans tolerate them for some reason... I said the last "tongue in cheek" of course b/c the government is now soo stuffed with lobbyists representing corporate interests that joe public has effectively lost control. Although, I doubt he ever had much control to begin with.

Why are there no lobbies for the average American? Probably b/c they are divided and conquered among social divisions: thus your Republicans vs. Democrats while the real issue is economic representation leading to effective ownership of capital.

Absent that, a new economic system that does not require capital then. As a minor capitalist, I don't like the latter, but hey, life is more than the scramble for capital. Or it could be.

2008 Oct 22 11:10 PM

[Wharf Rat:]

laying off 1000 employees might save the company $400 million, but he will still be having problems attracting the large display advertisers, and will continue to experience this problem. However, if he was to investigate the criminal actions of his employees in the UK office and what they are doing and stopped this behavior, then there might be a chance his company would be able to attract the kinds of display advertisers it so badly needs, but not until then.

this posting will probably not be allowed to be posted by none other then the yahoo morons who control other peoples computers through using their remote management tools, but at least they will be reading this and what they can expect to see in the near future from those people they re harrassing and creating problems for.

This has not been just one time, but hundreds of times over a period of 17 months.

2008 Oct 22 11:54 PM