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Yahoo to cut 15% of staff, divest assets

Yahoo has announced plans to cut 15% of its workforce and has begun to explore “divesting non-strategic assets of value” – including its online games and smart TV software.

Marissa MayerSpeaking on the company’s fourth quarter earnings call, Yahoo CEO Marissa Mayer (pictured) said that the board and management are looking to “strategic alternatives” in a bid to deliver value to shareholders.

Chief financial officer Kenneth Goldman said that through exits, efficiency programmes and investments, Yahoo plans to reduce its headcount to approximately 9,000 people by the end of 2016 – roughly 15% below today’s level, meaning the loss of some 1,590 jobs.

Discussing the direction of the company since she joined as boss in 2012, Mayer admitted that some investments have been “essential to Yahoo’s transformation, others have not”.

“To that end, in Q4 we closed Yahoo! Screen and shifted away from original scripted content,”said Mayer. “In 2016, some of our digital magazines willhave their content consolidated under one of our four core verticals, whileothers will be shut down.”

“We’ll also exit legacy products including Yahoo! Games and Smart TV, while we’ll continue to support a handful of higher-margin, higher-engagement legacy products like Flickr [and] Answers.”

Yahoo Smart TV is software that came pre-installed on selected models of TV to offer an ‘enhanced experience’ with access to interactive on-screen information and exclusive content.

Yahoo lists Samsung and Vzio as Yahoo Smart TV partners, though the former only supported the platform between 2009 and 2012. Previous Sony and Toshiba models also worked with the Yahoo software.

On the earnings call Mayer also announced a US$230 million impairment charge on Tumblr, the blogging platform it bought for US$1.1 billion in 2013, after Yahoo experienced a “slower ramp in monetisation than we initially expected” in 2015.

Overall the company reported a full year net loss of US$4.4billion. However, GAAP revenue of US$4.97 billion was up from US$4.62 billion for full year 2014.

In 2015 Yahoo said that for video it delivered US$375 million of GAAP revenue, up 64% year-on-year, with its live online stream of an NFL American Football match one of “many exciting highlights” in this area.

Mayer said the NFL stream “how strong our streaming technology can be and where streaming ultimately can go.”