A company as prominent and renowned as Yahoo is likely to regularly make headlines, but this week the news isn't so good.
In the midst of rumors of spending and reports of layoffs, here are five things to know about what's happening at Yahoo.
1. The media accused Yahoo of blowing money on a lavish holiday party. In December, Yahoo hosted an extravagant Great Gatsby-themed holiday party in San Francisco. Complete with a rented Rolls Royce, performers and gambling tables, the party cost the company an alleged $7 million, according to CNN Money.
2. Shareholders have accused the company of spending large amounts on other perks. Also in December, Shareholder Eric Jackson, a manager of the hedge fund SpringOwl, published a 99-page presentation and sent it to Yahoo's board, according to Business Insider. The report claimed Yahoo has been spending $450 million a year on free food for its employees, as well as $70,000 on a Wizard of Oz-themed photo shoot for its executives.
3. Yahoo CEO Marissa Mayer denied such allegations. Calling them "blatant falsehoods," Ms. Mayer reportedly said the costs were simply not true, according to CNN Money. "I have found these untruths to be upsetting, and I'm sure our investors have as well," she said.
She claimed the cost of the holiday party was $150 per employee, and the food and photo shoot costs were exaggerated by "more than a factor of three." "There are many more examples of untruths and mischaracterizations. Please know that we are very thoughtful about how we spend company resources, and we will continue to be," Ms. Mayer added.
4. Yahoo released its 2015 fourth quarter financial results Feb. 2. Yahoo reported earnings of 13 cents per share on $1.27 billion in revenue for the fourth quarter. But the company also posted a net loss of $4.44 billion, according to CNBC.
5. Alongside its financial results, Yahoo released a four-point strategic turnaround plan. The plan encompasses four key factors, according to Business Insider:
- "Play to strengths to grow user engagement." This includes prioritizing its large user base. The company plans to utilize three global platforms — Search, Mail and Tumblr — and four verticals — News, Sports, Finance and Lifestyle — for consumer products.
- "Drive Mavens revenue growth." Yahoo's "Mavens" businesses include its mobile, video, native and social sectors. Since GAAP revenue in these businesses exceeded $1.6 billion in 2015, Yahoo plans to continue its emphasis on them.
- "Simplify the business to improve execution." Instead of working on a broad number of products, Yahoo plans on capitalizing on its strengths by focusing on fewer products and investment areas.
- "Efficiently align resources." Yahoo plans to cut approximately 15 percent of its workforce and close five overseas offices in Buenos Aires, Dubai, Madrid, Mexico City and Milan. The job cuts will likely come in the first quarter.
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