Yahoo (YHOO) CEO Marissa Mayer is laying out her plan to reduce costs and increase growth. At first blush, investors are not impressed -- shares of the onetime Web pioneer fell 3 percent in after-hours trade.
The Internet company on Tuesday reported a 15 percent decline in adjusted quarterly revenue as it loses ground in online search and display advertising, with Internet users these days are more inclined to click to Facebook (FB) and Alphabet's Google (GOOG).
Yahoo's revenue (after deducting fees paid to partner websites) fell to $1 billion in the fourth quarter of 2015 from $1.18 billion a year earlier. Yahoo tallied a loss of $4.43 billion, or $4.70 per share, in the quarter, compared with net income of $166.3 million, or 17 cents per share, a year earlier.
The quarterly earnings came with an announcement that the company would layoff about 15 percent of its workforce and close five offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan.
Most of the changes will take place in the first quarter, but the the company expects to have about 9,000 employees and less than 1,000 contractors by the end of the year. The reductions will mean Yahoo's workforce will be roughly 42 percent smaller than in 2012 and will cut annual operating expenses by $400 million.
"These actions are part of a strategic plan designed to simplify the company's business and narrow its focus and to improve operational and cost efficiency," the company said in a regulatory filing.
Yahoo also said on Tuesday it was exploring strategic alternatives, along with pursuing a reverse spin-off of its Internet business.
At the helm since 2012, Mayer is under pressure to turn things around at the embattled technology company, where sales have fallen in seven of the past 10 quarters. Like her predecessors, the executive has not been able to revive the company, even while spending billions on acquisitions and new projects.
Under the gun to jump-start growth it its core advertising business, Yahoo last week promised to detail plans for a "more focused" company on or before its Tuesday earnings call. Activist investor Starboard Value had called for changes including to the company's board and senior management team.
Another activist investor, SpringOwl, blasted Yahoo's spending on employee perks, including $450 million over the past four years on catered food for workers at its Sunnyvale, California, headquarters.