Why Firing Employees May Backfire On Yahoo!

The mood is grim. The morale is on all time low. The insecurity is at its highest. The question that everyone is asking isn’t – “what’s next”, it’s – “who is next”. Scott Thomson is on a mission impossible. Yahoo’s revival will be no less than a miracle. Its glorious days are over and is literally on its last legs.  2000 employees are in the line of fire and this is just the beginning. The beginning of making the company lean, the beginning of  cutting the flab (firing will help it save $375 million) in short, it’s  the beginning of one last BIG effort to turnaround the company and save it from sinking into oblivion.

Below is the excerpt  from Scott Thomson (Yahoo’s CEO) memo circulated to its employees worldwide.

This was a tough week. Thank you all for supporting each other through a difficult time. As hard as big changes like this can be, I was encouraged to hear support from so many of you who really understand our need to operate differently. That said, I also know many of you still have a lot of questions about where we’re headed and how fast we can get there. “

He further added – “There’s a lot to do and that’s why I can’t stress enough that we all need to focus on getting stuff done. Getting stuff done is short hand for eliminating bureaucracy and barriers so we can all innovate as fast as our customers and the industry require. That’s pretty fast.

Our users want fun, informative, engaging experiences on all screens that they feel were designed just for them. Advertisers want it to be much easier to work with us and they want measurable ROI on their spending. We can do all that. Great user and advertiser experiences are what will ignite excitement around our brand and get us growing again. ”

Scott Thomson believes that yahoo can fight back. Well that’s what he has been hired for. His job is to  instill the confidence of the customers, advertisers, investors back into yahoo and of course keep the employee morale high. What he has done so far, has dented the confidence of his own force  and the rest are also getting restless about the options available.

The company may have the   foundation, the spirit, the backbone, and the creativity however it is still directionless and lacks big time on – “innovation”. Content which has been yahoo forte for years will not help it survive this rough patch. Something else is the call of hour.  A smart product, smart features in the existing ones , a game changer, something which can sweep the world off its feet. Nothing short of it will increase web traffic and re-establish it as a serious player. Firing employees will lead to safe decision making at the middle level. Firing would divert the focus on other things other than research, development and innovation. Firing employees is a double edged sword, it can hurt both ways.

In addition to it, another big question is – would yahoo cut on the big fat salaries of its top management? Sacking the employee is one thing, trimming the top management’s payout is another. That’s where the seriousness of the entire issue reflects. If the company is in mess, than no one is holier than thou. Every one should be prepared to bear the brunt and share the burden together. Is the company prepared for such drastic measures too? If that is not the case than the decision to fire 2000 employees will backfire, the company will continue to slide further  and will soon end up in Wikipedia’s archive as one of the giants of internet which couldn’t evolve with time.

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