Communicating restructuring at Yahoo!

Submitted by: Alberto Montagner

Yahoo! CEO Jerry Yang wrote an e-mail to all Yahoo employees (yahoos, as he calls them) to announce a corporate restructuring program in October 2008. The text of the e-mail may be found on the website linked below and I believe it is a great example of layoff communication.


Clear explanation about the change definition process: Jerry briefly reminds everyone about the “tremendously challenging year” the company has gone through, subsequently underlining how the management focus has been on top priorities, looking at the same time at the company’s cost structure. To strike a balance between the two, an external consulting company was hired and suggestions from employees themselves were collected. The resulting plan, how painful it may result, is therefore presented as the outcome of a joint effort by management, by the full staff and by an external company to find the most acceptable and sustainable solution.

Timing: the e-mail was sent “after our earnings announcement, and before our all hands meeting tomorrow”. Jerry clearly feels rumors around the company and catches the most proper moment to send out the announcement, leveraging the momentum given by the earnings announcement.

Emotional connection with employees: “we understand that hearing this news now creates uncertainty”, “having layoffs is very difficult” and the steps we are taking are not easy for us as a company” are just a few of the expressions the CEO uses to get closer to the employees, to share their pain and their possible uncertainties about the future.

Vision of the future: after the hard communication about layoffs, Jerry starts using positive, forward looking words and expressions, possibly with the intent of supporting the employees not affected by the imminent restructuring. He talks about “moving ahead”, “long term success”, the company being “a place where consumers turn for information and communications”.

Next steps: the CEO explicitly mentions that “affected employees will be notified of layoffs in the next several weeks” and that severance packages as well as outplacement services will be offered. Although uncertainty after the communication is expected (will I stay or will I go?), fairness and information sharing about what to expect are a centerpiece of the communication.