Case Study Trouble At Yahoo

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Management in Action Case Study Major Problems at Yahoo! Trouble at Yahoo! Marissa Mayer joined Yahoo! in 2012 as the new CEO after leaving google. She was brought in to fix the sinking ship and turn around Yahoo!’s failing business model. But things haven’t gone as planned. For instance, she immediately put in place a new business strategy that meant the acquiring of businesses. Yahoo! acquired Tumblr, a blogging company for $1.1 billion. However, this did not help Yahoo!, instead it meant they were spending more money than the companies actual value. This lead to investors calling for Yahoo! to save money by the sale of Yahoo!’s minor business, and the firing/laying off employees. In doing so it created low morale and unhappy employees. The…show more content…
investors started to become unhappy with Yahoo!’s poor performance, over spending, and bad acquisitions of companies. Some investors came calling for Yahoo! to sell its minor businesses and focus on its core companies. Investors also told Yahoo! they need to begin laying off or firing employees to stay afloat. When one problem leads to another and when Yahoo! had to resort to layoffs and firing of employees it came fast and soon employees were left leaving the company for it competitors of left fearing for their jobs. This meant that work at Yahoo! was starting to decline, employees weren’t happy, or the work wasn’t getting done. To combat this Yahoo! decided to give employees many different perks for working there, such as iPhones, parties, and free lunches. Yahoo! also set a budget of $108,000,000 a year for free food. Other employees however made out far better, as Ms. Mayer began to give out hefty retention packages to highly trained and important employees to stay and reject offers from other companies. These retention packages in some cases were worth more than $1 million dollars. These retention packages also came with side effects as more employees became unhappy after not receiving retention packages although they remained loyal by not seeking job opportunities…show more content…
could’ve avoid many of its problems currently going on if they would’ve made smarted business moves. If Yahoo! Wouldn’t have started focusing on acquiring new businesses and instead focused more time, money, and resources to its core company. The investors would’ve been satisfied because Yahoo!’s spending would be far less than its market value. By focusing on its core business yahoo would not have had to make some of the decisions in laying off or firing people. This would have led to higher moral between Yahoo! employees, therefore making it so they didn’t need to spend as much money on perks for employees to keep them satisfied. Yahoo! also would not have had to give out millions of dollars in retention packages due to unhappy employees and employees seeking other career opportunities. If Yahoo! Continues to operate in their current state, the company will continue to fail, and employees will continue to seek out other career opportunities thus meaning Yahoo! will continue to roll out low quality products driving consumers to use other competing companies’
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