New Yahoo CEO freezes employee salaries

Bartz follows Obama's lead by freezing salaries as Yahoo looks to rein in its finances.

With Carol Bartz just about a week into her new reign as the CEO of Yahoo, she's already made one tough call - to implement an employee salary freeze.

The company is trying to harness its finances as it struggles for mind and market share while it faces Google and an increasingly bad economy.

"Based on the current economic environment and our focus on keeping costs in line with revenues, we have decided that providing annual salary increases would not be in the best interests of the company or our shareholders," said Kim Rubey, a Yahoo spokesman in an email to Computerworld . "This decision is consistent with our broader focus on strategically reducing Yahoo's costs, an effort that has been underway for some time now."

Industry analysts had said a week ago that Bartz, who is known in business circles as a tough businesswoman who is not afraid to speak her mind, would have some big, and not so easy, decisions to make soon after coming on board to lead online pioneer Yahoo .

Renny Ponvert, CEO of Management CV Inc., whose analysts track CEOs and top executives, said in a previous interview that one of the first things Bartz would need to focus on is improving employee morale. While a salary freeze may not fall in line with that goal, stabilizing the company just might.

"Yahoo [was] struggling even before the economic downturn," said Allan Krans, a senior analyst with Technology Business Research, Inc. "As an early indication, [the salary freeze] says she's focusing on reducing costs. Coming in, people expected she'd have more operational discipline than [former CEO Jerry] Yang. It's like Obama going in and freezing salaries for senior staff. I think a lot of people at Yahoo have been expecting that for some time."

Yahoo has been losing market share to Google in recent years, and Bartz is looking to figure out how the company can rebound in a market that has changed dramatically over the past several years.

Yahoo's salary freeze comes a day after Microsoft announced plans to cut 5,000 jobs amid falling profits. About 1,400 positions already were eliminated this week. The job cuts come as the company announced that fourth-quarter profits fell 11% to US$4.17 billion.

Also Thursday, Google reported that its fourth profit took a dive. CEO Eric Schmidt blamed the declining profits on one-time investment write-downs.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags YahooCarol Bartz

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sharon Gaudin

Computerworld
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?