Last night, we spoke to a Yahoo executive, who, like about 18,000 other people, had a brutal day at the office yesterday.
That’s because Yahoo fired 2,000 employees in the past 24 hours, reducing its headcount by 14%. And everyone at Big Purple knows those cuts are just the beginning.
But while letting lots of people go was demoralizing, the worst part of the day for this executive was not knowing what, exactly the purpose of the layoffs were beyond cost-cutting.
That’s not to say there isn’t a plan. There may be. But no one knows about it. Or at least, according to this executive, no one but two people: Yahoo CEO Scott Thompson and his one and only confidant at the company, CFO Tim Morse.
Yesterday, Thompson sent out a memo saying Yahoo would organise around three core businesses: Media and Communications, Platforms, and Data. But our source says the plan is not nearly so fully formed as that memo made it sound.
“It’s not as flushed out as everybody’s making out. Scott is totally shooting from the hip. He has said it in a couple meetings, ‘I’m going with my gut.”
According to this source, the only obvious takeaway from yesterday’s cuts is that Thompson wants to move engineering and product people closer to business lines. Also, it’s become clear over the past few weeks that Thompson wants to commit to Yahoo’s media business.
Other than that, huge questions are still up in the air. For example, it’s unknown who is going to run Yahoo’s Mail group, a very important product for the company that drives tons of traffic to its media properties.
The secrecy is a big change at Yahoo.
Thompson’s predecessor, Carol Bartz, “was a lunatic,” says our source, “but she was very open and huggy and talked about everything and favoured consensus. Scott’s the opposite.”
“I have to give him credit though. He’s trying to get us to focus. He’s taking risks.”