6 ms·

Yahoo to lay off 1,400 employees

11 points by razorburn 18y ago

fallentimes 18y ago
Why does Yahoo have so many employees to begin with?
- ardit33 18y ago
  typical middle managerial game in large companies where politics rule. A lot of Managers want to add as much headcount as they can under them so they look more important, even though the aditional headcount is not really needed.
- lacker 18y ago
  Middle management doesn't have so much to do with it. It's simply because their business is huge. It takes a lot of behind the scenes infrastructure work to run one of the biggest websites in the world. Include ad sales, marketing, HR, et cetera and 14,000 employees is reasonable. In terms of revenue per employee Yahoo seems reasonably staffed for its business size, at least for the tech sector. For comparison, revenues per employee: Yahoo: $504,559 http://www.smartmoney.com/stock-quote/?story=profile&symbol=YHOO http://www.smartmoney.com/stock-quote/?story=profile&sym... Microsoft: $663,956 http://www.smartmoney.com/stock-quote/?story=profile&symbol=MSFT http://www.smartmoney.com/stock-quote/?story=profile&sym... IBM: $272,896 http://www.smartmoney.com/stock-quote/?story=profile&symbol=IBM http://www.smartmoney.com/stock-quote/?story=profile&sym... Amazon and Google are a lot higher, around $1 mil revenue per employee, so it really varies, but it's not totally crazy for a business of Yahoo's size to have 14,000 employees. What it boils down to is, problems that are so small they affect 1% of your users, for a small site that isn't worth worrying about. But for Yahoo it's worth it to have a whole team work on the problem.
  - fallentimes 18y ago
    Also of note (and from the same source): Income Per Employee Yahoo: $72,055 Microsoft: $194,297 IBM: $30,681 Amazon: $34,588 Google: $303,903 It's usually good to look at revenue & net income together. Currently, I'd invest in these companies roughly in order of net income per employee.
  - jdavid 18y ago
    Nintendo is pretty sick, with like $500k in profit per employee and $2.5 million in revenue per employee. http://www.joystiq.com/2007/05/31/fortune-nintendo-is-beating-microsoft-and-sony/ http://www.joystiq.com/2007/05/31/fortune-nintendo-is-beatin... We should all aspire to build companies like Nintendo, that are not the largest company in their space, but are still able to have the largest wins. Think of the chances that company has taken over the years to reinvent themselves yet they win big when they do.
    - lacker 18y ago
      Definitely. Nintendo is also a great example of launching, getting customers, and iterating over time to meet the market. One cool thing a lot of people don't know is that Nintendo actually predates the NES. They had a version of Duck Hunt that plugged into a TV in '77. Check it out - http://www.japan-games.com/Database/images/Nintendo/TV-Game/Duckhunt/index.htm http://www.japan-games.com/Database/images/Nintendo/TV-Game/...
markessien 18y ago
They will save more than 50 million a year from this. Considering that their yearly income is just 200 million, this is quite a good move financially. Assuming of course, that these workers were excess. But I like Yahoo. Nothing like tough times to help a company get lean, mean and start innovating again.
- fallentimes 18y ago
  I agree. What the majority of the mainstream media ignores is that they have the most popular sports site (yes, even bigger than espn), most popular mail service, most popular portal, top 3 fantasy sports site, and top 3 finance site. So in short, they have a lot of good going for them. They just need to stop horsing around with bullshit social networks (3 failed tries to date) & the like and focus on what they're good at.
  - alecco 18y ago
    Yeah, and in key web technologies like Javascript they are kings.
- timtrueman 18y ago
  Where exactly did you get these numbers? Unless Yahoos earn an average of $35k a year, $50M is way off. Also net income is over $1B a year. Not disagreeing with your point at all, just curious about the numbers you mention. http://finance.yahoo.com/q/ks?s=YHOO http://finance.yahoo.com/q/ks?s=YHOO
  - markessien 18y ago
    Net revenue is over a billion, but what the company actually makes after costs is 50 million a quarter. Was in the linked article. I estimated the annual salary low because I don't know what category of worker would be laid off. Maybe it's just the janitors going.
    - timtrueman 18y ago
      I think you're getting revenue and net income confused. Revenue is over $7B TTM...Net INCOME is over $1B TTM. Sure Q3 was $54M, but at least use TTM or something other than multipling by 4. That's just misleading. Also even the linked article said "[t]he goal was to reduce annual expenses by more than $400 million before the end of the year". Your estimate of saving $50M through layoffs is absurdly off. Even people with no faith in the layoffs ability to reduce operating costs would admit it's going to be the majority of the $400M, i.e. saving at least $200M or roughly $150k per employee (a much more realistic figure if you remember there are costs outside of salary to an employer).

11 points by razorburn 18y ago

fallentimes 18y ago

Why does Yahoo have so many employees to begin with?

ardit33 18y ago
typical middle managerial game in large companies where politics rule. A lot of Managers want to add as much headcount as they can under them so they look more important, even though the aditional headcount is not really needed.
lacker 18y ago
Middle management doesn't have so much to do with it. It's simply because their business is huge. It takes a lot of behind the scenes infrastructure work to run one of the biggest websites in the world. Include ad sales, marketing, HR, et cetera and 14,000 employees is reasonable. In terms of revenue per employee Yahoo seems reasonably staffed for its business size, at least for the tech sector. For comparison, revenues per employee: Yahoo: $504,559 http://www.smartmoney.com/stock-quote/?story=profile&symbol=YHOO http://www.smartmoney.com/stock-quote/?story=profile&sym... Microsoft: $663,956 http://www.smartmoney.com/stock-quote/?story=profile&symbol=MSFT http://www.smartmoney.com/stock-quote/?story=profile&sym... IBM: $272,896 http://www.smartmoney.com/stock-quote/?story=profile&symbol=IBM http://www.smartmoney.com/stock-quote/?story=profile&sym... Amazon and Google are a lot higher, around $1 mil revenue per employee, so it really varies, but it's not totally crazy for a business of Yahoo's size to have 14,000 employees. What it boils down to is, problems that are so small they affect 1% of your users, for a small site that isn't worth worrying about. But for Yahoo it's worth it to have a whole team work on the problem.
- fallentimes 18y ago
  Also of note (and from the same source): Income Per Employee Yahoo: $72,055 Microsoft: $194,297 IBM: $30,681 Amazon: $34,588 Google: $303,903 It's usually good to look at revenue & net income together. Currently, I'd invest in these companies roughly in order of net income per employee.
- jdavid 18y ago
  Nintendo is pretty sick, with like $500k in profit per employee and $2.5 million in revenue per employee. http://www.joystiq.com/2007/05/31/fortune-nintendo-is-beating-microsoft-and-sony/ http://www.joystiq.com/2007/05/31/fortune-nintendo-is-beatin... We should all aspire to build companies like Nintendo, that are not the largest company in their space, but are still able to have the largest wins. Think of the chances that company has taken over the years to reinvent themselves yet they win big when they do.
  - lacker 18y ago
    Definitely. Nintendo is also a great example of launching, getting customers, and iterating over time to meet the market. One cool thing a lot of people don't know is that Nintendo actually predates the NES. They had a version of Duck Hunt that plugged into a TV in '77. Check it out - http://www.japan-games.com/Database/images/Nintendo/TV-Game/Duckhunt/index.htm http://www.japan-games.com/Database/images/Nintendo/TV-Game/...

markessien 18y ago

They will save more than 50 million a year from this. Considering that their yearly income is just 200 million, this is quite a good move financially. Assuming of course, that these workers were excess. But I like Yahoo. Nothing like tough times to help a company get lean, mean and start innovating again.

fallentimes 18y ago
I agree. What the majority of the mainstream media ignores is that they have the most popular sports site (yes, even bigger than espn), most popular mail service, most popular portal, top 3 fantasy sports site, and top 3 finance site. So in short, they have a lot of good going for them. They just need to stop horsing around with bullshit social networks (3 failed tries to date) & the like and focus on what they're good at.
- alecco 18y ago
  Yeah, and in key web technologies like Javascript they are kings.
timtrueman 18y ago
Where exactly did you get these numbers? Unless Yahoos earn an average of $35k a year, $50M is way off. Also net income is over $1B a year. Not disagreeing with your point at all, just curious about the numbers you mention. http://finance.yahoo.com/q/ks?s=YHOO http://finance.yahoo.com/q/ks?s=YHOO
- markessien 18y ago
  Net revenue is over a billion, but what the company actually makes after costs is 50 million a quarter. Was in the linked article. I estimated the annual salary low because I don't know what category of worker would be laid off. Maybe it's just the janitors going.
  - timtrueman 18y ago
    I think you're getting revenue and net income confused. Revenue is over $7B TTM...Net INCOME is over $1B TTM. Sure Q3 was $54M, but at least use TTM or something other than multipling by 4. That's just misleading. Also even the linked article said "[t]he goal was to reduce annual expenses by more than $400 million before the end of the year". Your estimate of saving $50M through layoffs is absurdly off. Even people with no faith in the layoffs ability to reduce operating costs would admit it's going to be the majority of the $400M, i.e. saving at least $200M or roughly $150k per employee (a much more realistic figure if you remember there are costs outside of salary to an employer).