Posted December 11, 2008 4:09 pm by with 7 comments

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Just a day after their massive layoffs began, Yahoo’s in the news again—and again, it’s not really the kind of story you want about your company. This time, Yahoo has reduced their severance stipulation for a merger or takeover, removing a possible barrier to acquisition.

According to the AP, the new plan will make it significantly more difficult for any employees laid off after a merger to receive the generous severance packages that were guaranteed to all of its then-14,000 employees while Microsoft was vying for the company:

Yahoo agreed to revisions that will make it more difficult for employees to qualify for severance pay after a takeover. The changes also limit the eligibility period to the first year following a sale and allows the board to scrap the plan entirely—an option that wasn’t available under the original terms.

The revisions also specify the severance packages won’t be available if Yahoo decides to sell its search operations to Microsoft. That’s a deal several major shareholders, including board member Carl Icahn, are trying to make happen.

The changes come as an attempt to settle a shareholder lawsuit (this one?) alleging that the severance plan was a “poison pill” specifically calculated to prevent a Microsoft buyout—a claim Carl Icahn bandied about liberally at the beginning of June.

The changes take effect immediately. However, if a settlement in the lawsuit against Yahoo isn’t approved in the next 90 days, the changes to the severance plan automatically revert.

Naturally, Yahoo maintains that the changes aren’t an effort to attract a buyer for some or all of the company, and Microsoft maintains that they’re no longer interested. But what do you think—will this pave the way for a new deal?

  • Poor Yahoo, maybe Microsoft not interested to buy yahoo again because they want to keep their pocket healthy in this global economic recession? Reduce the employee its the only choice to reduce the bleeding. Maybe Yahoo can sell their other small company who already merger with them, not selling their main business.

  • I dont think Yahoo-Microsoft deal is ever going to happen.

    There is only one company which can save Yahoo right now..and that is Yahoo itself! They just need to refocus on their strengths rather than being someone else’s ….. you know what.

    Saad Kamal’s last blog post..WordPress 2.7 Coltrane is Out

  • I would not want to be at Yahoo right now … their existing problems coupled with the economic downturn make for a very nasty mixture now.

  • What a pity that such a great company has to go through this very bad patch. I wonder whether they will ever get back to their original shape! I also wonder what happened about the new CEO!

    Nicole Price’s last blog post..Festive Discounts

  • why can’t yahoo get bought by someone already?

  • Even if the yahoo Microsoft deal does not happen I think someone is going to buy yahoo. They are a solid company and severely under valued right now. Its sad that the severance stipulation was taken out I imagine its the pressure from the shareholders.

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