Now that Yahoo employees have had the pleasure of reading about their impending fate for weeks, management will reportedly finally announce the mass firings this week. The exact number has yet to be released–somewhere between 1500 and 3000, it seems–but this mass-firing round will certainly be larger than the last mass-firing round. And there are still two ways Yahoo can blow it:
- Don’t cut deep enough. Yahoo is already careening down the road of death-by-a-thousand cuts. This, you may remember, is one of the tactics that demoralized AOL (the “Holiday Layoffs” became an annual tradition). A simple check of the numbers suggests that Yahoo could cut 3,000 people and still not have a cost structure that could be described as lean. If, in its fear of disrupting the happy-go-lucky culture it aspires to have, Yahoo insists on making only “surgical” cuts, the rest of the company’s employees will spend the next six months panicked about who and when will be next.
- Announce the cuts now but don’t actually make them until mid-December. Multiple Yahoos are telling Kara Swisher that the cuts won’t be made until a week before Christmas. In addition to being a disastrous PR move–the quest to become AOL II would gain greater momentum–this timing would effectively freeze the company for the next two months. Shooting one-in-10 employees is not devastating from a morale perspective, but it’s enough to keep everyone wondering who in their close circle of colleagues is a dead man walking. And that’s not conducive to the kind of focus and intensity Yahoo needs over the next few months.
eBay blew it by planning its much-needed layoffs back in the summer, when business hadn’t fallen off a cliff. The company fired far too few people, the Q4 outlook suffered, and the stock took it on the chin.
Yahoo, it seems, began the firing-planning process only a month or so ago, when it hired Bain. One hopes that this will allow management to see just how deeply it should cut. Based on the latest leaked numbers (1500), however, this may not be the case.
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