Having passed on a $35 exit bonanza by blowing the Microsoft deal, Yahoo (YHOO) now appears to have returned to its previous path of death by a thousand cuts. Specifically, the firm appears to have implemented a hiring freeze, suggesting that current business is weak, and senior executives continue to leave (Jeff Weiner being the latest).
Jerry can’t do anything about the economy, but he sure as heck can do something about the executive exodus. And he has to, now, before more departures further damage his credibility.
Here’s how he should do it:
Gather Yahoo’s hundreds of vice presidents together and give them the Robert-DeNiro-motivates-the-troops-in-the-Untouchables speech. (Stalk around the table with a baseball bat, drone on about commitment and loyalty, and close by, um, dispatching someone).
Specifically, Jerry should deliver the following message:
- We’re going to turn this company around.
- You’re with me or you’re gone
- Everyone who isn’t with me will be gone by the first of July. How? By taking the voluntary severance packages we’re now offering with nice benefits (option vesting, etc.). You have one week to evaluate these packages. If you want to leave, take one. After July 1, if you quit, you won’t get jack.
- If you want to stay, we’re going to load you up with stock options at the current pummelled stock price. We’re also going to give you a 10% cash pay cut. That way, your interests, our shareholders’ interests, and my interests will be perfectly aligned.
- Always wanted to work for a VC firm, try a start-up, or spend more time with the kids? Take the package. Want to double-down and help me make Yahoo a great company again? Double down.
There are a lot of talented managers out there, and Yahoo needs to recruit some of them. Most of all, Yahoo needs to build a committed, long-term management team and stem the bleed. If Jerry can’t even convince his senior managers that he’s going to get the company headed in the right direction, how on earth is he going to convince anyone else?