Yang's e-mail on Yahoo restructuring

Yahoo CEO Jerry Yang tells Yahoo employees in an e-mail that the company has "been through a tremendously challenging year." This is the full text of his e-mail:

Yahoo CEO Jerry Yang

(Credit: CNET Networks)

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

[close5828]

I like Yahoo, but I don't think this guy really knows what he's doing....

[crunkmonkey101]

no way he does.

[crunkmonkey101]

glad to see jerry is so enthusiastic about layoffs. cool, calm, lowercase and collected jerry.

[casademike]

Dear Jerry,

Each and every sentence begins with a capital letter. As the CEO of a rather large company, I just thought you should know that.

[JoeF2]

Yeah, and calling his employees "yahoos" isn't right, either
</sarcasm>

Lighten up. How about commenting on the content instead of on his writing style?

[casademike]

How about I comment on whatever I want to? Yeah. I think I will do that.....D-Bag.

[Luis Menendez]

Will Yahoo fade or merge? I think they drop the ball in terms of the Microsoft offer, I wonder what other company will be a good match for them. I used to like Yahoo a lot.

[Solaris_User]

What would happen if two failing companies merged? You would then have nothing more than one large failing company. Microsoft is actually doing worse in online ad revenue than Yahoo. Google is the only one that seems to be able to turn profit in this area.. and boy are they.

[gggg sssss]

Stock price of $5.00 for Xmas

[Solaris_User]

Reg reports that they are going to be "relocating some operations to lower cost geographies"

That is the nice way of saying we are outsourcing this shiz because US taxes are too expensive.

[travelscott]

I appreciate the fact that you have published Jerry's email in it's original form (all lower-case), it says a lot about his style and mindset at this critical time.

I can only wonder how much he regrets turning down the M$ offer of $33 per share. Today's price for Yahoo on the open market: $12.07.

[fdunn3]

Jerry Yang doesn't regret turning down Microsoft's offer because had he taken the offer he wouldn't be getting the fat paycheck he is today as he is saying Merry Christmas to 1500 Yahoo employees.

None of which would get paid in the full career what Jerry Yang gets paid annually.

You watch, he'll probably get a bonus for this. He'll run into the ground but not before making enough to "comfortably" retire on.

Hey Shareholders....Aren't you glad you kept him on? I'll bet Carl is sorry he tried to turn THIS company!