Yahoo plans to cut its workforce by at least 10% this year and the axe is expected to fall on more than 1,000 employees. The move has reportedly been prompted by growing frustration among Yahoo shareholders.
Sources told Business Insider that the layoffs could begin as early as the end of January. Sarah Meron, a spokesperson for Yahoo, told Reuters: "We are not confirming this rumour or commenting further."
Although the cutbacks are expected to affect all departments of the company, the divisions most likely to be hit are Yahoo's media business and European operations. The technology platform group, which includes the services that support Yahoo's technological products and services, could bear the brunt of the job cuts.
Yahoo's reported move comes hot on the heels of one of its major investors, Starboard Value LP, taking aim at the company's CEO, Marissa Mayer and her team in a letter to the board of directors. The note is said to have raised questions about the company's leadership and direction, hinting at the possibility of a proxy battle in the offing.
Without naming anybody, activist investor Starboard is believed to have demanded that the company's leadership team, including Mayer and her officers, be replaced. Starboard reportedly threatened to shake up the board if the company's stock continues to plummet.
According to Reuters, Starboard – which owns 0.75% of Yahoo – has been one of the most vocal shareholders in demanding major changes. Since 2014, Starboard has been pressing Yahoo to cut its Asian assets. It also wants stakes in the Chinese e-commerce company Alibaba and Yahoo Japan to be separated.
Following the hiring of McKinsey & Co in November 2015, Yahoo employees have been bracing themselves for job cuts. McKinsey was hired by Yahoo to assist in the company's internal reorganisation and is believed to be a key player in pruning the company's headcount by 14% so far.
In a statement, Yahoo said it would reveal "additional plans for a more focused Yahoo on or before our Q4 earnings call".