Posted May 18, 2007 3:49 pm by with 8 comments

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BusinessWeek reports that “Even Yahoo! Gets the Blues.” After hiring a new CFO this week, Yahoo’s shares fell 1.7%. There are reports that a large number of employees who’ve been with the company six years or longer are beginning to explore other employment options:

[N]ot the very top execs, but the seasoned middle managers Yahoo needs to carry out its ambitious turnaround plans. “The last wave is folks who have been there a long time,” says former Yahoo Vice-President Teresa Phillips, co-founder and CEO of stealth startup Graspr, who left last year on good terms. “Now it’s the people who have the institutional knowledge who are leaving.”

Of course, “Yahoo says that it’s not having more trouble with hiring or attrition and that some of the departures are a natural result of the restructuring.”

BusinessWeek covers a lot of the low points—and highlights—in Yahoo’s last few months, from the December restructure to the premiere of Panama to acquiring Right Media to rumors of being acquired by MSFT to consolidating services like Yahoo Photos and closing Auctions. BusinessWeek concludes:

Can Semel, who saved Yahoo from dot-com oblivion after he arrived in 2001, do it again? “I think Terry is an asset,” says a former Yahoo who notes that the company needs a seasoned media exec in charge. “The question is: Is he the right guy to rally the people?” Clearly, many of Yahoo’s 11,700 employees think so. Problem is, many others keep voting with their feet.

We’ve been here, reporting on it all. What do you think? Can Semel turn their fortunes around? Or was his success in 2001 just delaying the inevitable for Yahoo?

  • One the one hand I could easily see why Yahoo might be growing tired in the fight against the Giant G but on the other hand, I think public perception is slowly turning against Google as they get further away from their stated values etc. Now might very well be the best time to be a part of Yahoo.

  • I agree with SEOregfugee. People are always getting tired of where they work, especially if you are battling against a giant like Google and every decision you make is weighed against Google.

    I also agree that Google is losing face and it will be easier for people to get into their markets or to get into competing markets that google doesn’t have a big hold on.

  • Concerning Semel I say he is disconnected from the workforce and that defines the corporate culture of the business. Unlike the workplace culture of a Facebook where the CEO is on site, connected and hands on.
    I believe this matters to top engineers, they want recognition for their efforts, not attaboys by memo from corporate.

  • This I know for sure.

    The type of work atmospheres and perks available to employees at Yahoo are not available at the vast majority of employers around the country. These people were probably brought in right out of college and have no idea what goes on in a “normal” work place.

    Those that are looking to leave may get lucky and find a similar environment because of where they live and where they have worked but I bet many will not.

    Management is not always popular or respected and there is no guarantee of such. I say many of these people are winers who probably will not make the transition away from Yahoo.

    Good luck to them.

  • MikeM is right. True at “normal” companies you have a corporate structure, but at companies like yahoo, where you can’t easily replace a creative mind, those creative minds need rocognition that they’re part of the big picture.

    IMHO Normal corporate structures aren’t going to work well in the fast paced and ever changing tech world. You need to give your employees more than just a nice christmas party at the end of the year.

  • Jeff

    Terry – it’s important to keep in mind that the “average” Yahoo! employee isn’t an “average” employee and that “the vast majority of employers around the country” aren’t where these folks are running to. I’d bet good money that a lot of these people have the talent and connections to go it alone and aren’t really interested in working for anyone, be it Google, Microsoft, or whomever.

    Erik – a nice Christmas party at the end of the year would be an improvement over what a lot of companies that desperately need their employees to innovate and be creative are doing.

    I like in metro Detroit, and I doubt I have to tell anyone how badly screwed employees at the “Big Three” auto manufacturers and Tier I suppliers are these days, but even relatively healthy Michigan companies in non-manufacturing sectors of the economy are stifling their employees because they’re too chicken-shit to risk success when the status quo is so “safe.”

    I’ve got a good job at a good I genuinely like working for, and I just got a raise so I’m not disgruntled by any stretch of the imagination. However, I can honestly say that since the economic going got really tough here, my management has responded by rewarding mediocrity, discouraging (and in some cases – punishing) innovation and creativity, and treating well-paid IT and project management staff like hourly temp workers.

    Meetings have been called where management acknowledges the resentment and frustration of their charges and asks for feedback, only to respond with profanity-laden denials (at worst) or promises to address the situation through management-only committees (at best).

    It’s sad, but I know about a half-dozen people who, despite having secure, well-paying jobs in a lousy economy – are aggressively looking to move because of the ham-handed management practices that have been put in place supposedly to KEEP workers.

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  • Ya-booo!

    There are a lot of things weighing on morale at Yahoo. Low stock prices. Losing market share to Google. A seemingly endless reorganization. Poor communication from management. And compensation policies that denied a lot of good employees raises this year, hired newbies with large signing bonuses and higher salaries than current Yahoos, outsourced jobs to India, and provided underperforming CEO Terry Semel with $71 million in stock options for an awful year.

    If Panama works, good old Terry is sitting on a windfall; a lot of employees will get very little for all their hard work. If it doesn’t, Terry still retires with a massive fortune and probably a nine-figure severance package. It’s appalling.