Valley PR Blog

Yahoo’s Wang buries lead

By Len Gutman on October 21st, 2008 In Best Practices

TechCrunch got access to an e-mail that went out to Yahoo! employees this afternoon following the company’s earnings announcement. It took Yahoo! CEO Jerry Wang five paragraphs to get to the news that the company was laying off 10% of its workforce. Yikes, I’m sure that went over well with the employees.

Here is that fifth paragraph (you can read the full text of the letter at TechCrunch):

“today as part of our q3 earnings release, we said that our goal is to reduce our current annualized cost run rate of roughly $3.9 billion by more than $400 million before the end of 2008. we are targeting non-headcount expenses wherever possible, such as facilities and outside services. however, because compensation expenses are the single largest part of our costs, we anticipate a reduction of at least 10% of our global workforce by year-end.”

all lowercase is apparently mr. wang’s m.o. Regardless, I imagine there was no face-to-face employee/manager meetings in advance of this news. I know many of you handle employee communications and I wonder what you think of this tactic.

As it happens I have nearly 15 years of experience in corporate employee communications and I rarely, if ever, saw companies handle layoffs in a straight-forward way. I think it’s okay for Yahoo! to announce its plans for a layoff via e-mail — it is 2008 after all. But to bury it five paragraphs in sort of trivializes it and makes me think less of jerry wang and Yahoo! in general.

Comments

Employees and investors knew it was coming……

Good Morning Silicon Valley
Article Launched: 10/20/2008 03:34:32 PM PDT

Hey, you with the scythe — Halloween party’s not till … aghhh!
By JOHN MURRELL

The specter of massive layoffs has been looming over Yahoo since, well, since shortly after the company laid off 1,000 workers in January, so the only real suspense has been of the bad horror movie variety — waiting to see who gets it and how. Now the creepy music is getting louder, setting up a scene Tuesday in which CEO Jerry Yang is expected to chop through a door during the third-quarter earnings announcement and begin the bloodletting. The body count, according to sources, is expected to be as high or higher this time, perhaps 10 percent of the company’s 14,300 employees. Aside from layoffs, the Wall Street Journal’s sources say, some managers are being asked to find 15 percent in operating budget savings. Beyond all that, the Journal says, management consultants are still looking at other “structural changes” (see “Fellow Yahoos, I’d like you to meet the Bain of your existence”). And if Yahoo isn’t careful, says the Silicon Alley Insider, there are a couple of ways it could make a bad situation worse: by not cutting deeply enough and by not implementing the layoffs until just before Christmas, leaving an already demoralized workforce hanging. Grim times, and it’s cold comfort that Yahoo has plenty of company in its misery. The layoff tracker at TechCrunch already runs from Adbrite to Zivity and is growing.

Most companies believe the employees understand the financials and want to hear about them in the context of their earnings call. But as Len pointed out, most will jump right to how it affects them. EEK! Layoffs. That’s the lead, that’s what they care about - that’s what hits them at the emotional level.

As I always say: get to the f–ing point. So why dodge the issue? It’s an employee communication, speak directly to the employees. Comfort them!

The trouble with these things is some unethical knucklehead always sends the email to the press so internal communicators err on the side of caution - regurgitating messages from the earnings call ends up being the smart way to go.

But wouldn’t it be cool if he was direct? “i want you to hear this from me first: we will need to reduce headcount by about 10 percent. it’s unpleasant but it’s reality. we are doing everything we can to make sure this number is as close to zero as possible, including x,y,z.

“the economy is in bad shape and we’re not immune. our earnings took a beating this quarter (show stats).”

The guy only takes $1 in salary so he has some ground to stand on here.

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