One endangered species has turned out to be more resilient than expected: Unproductive employees.
You might think that after a grueling recession that tossed 8 million people out of work and left many companies understaffed, those who still had jobs would all be pulling their weight. In fact, one of the most common complaints at companies that have endured layoffs is that each remaining employee is expected to do the work of two or three people.
But apparently not at Yahoo, the web titan that has been struggling with subpar profitability. Marissa Mayer, the CEO brought in from Google last July to help turn Yahoo around, recently instituted a controversial new policy that will ban telecommuting as of June, requiring all employees to work from a company office. Yahoo claims that more interaction among employees will foster more collaboration and innovation, which Yahoo's critics say the firm desperately needs.
Worker advocates have howled, arguing that the in-office requirement is a return to Mad Men-style paternalism that will harm working parents and others who can be more productive (and more available to their families) with a flexible work schedule. There's also the risk Yahoo may lose some talented employees who have the leverage to insist on personalized work arrangements, and may go elsewhere if forced into the grind of a daily commute.
But another startling revelation is the extent to which Yahoo seems to be marbled with deadbeats taking advantage of a cushy telecommuting setup to slack off. Yahoo won't acknowledge this overtly, and it has declined to comment publicly on the new policy. But the internal memo announcing the policy, first published by the tech site All Things D, said that "speed and quality are often sacrificed when we work from home." Other news outlets have reported that the office-only policy will be unusually strict, with few exceptions. For those who don't comply, Yahoo is already considering "next steps," according to the memo.
Part of the unstated strategy may be to get rid of corporate deadwood. The website Business Insider cited one source familiar with Mayer's strategy as saying that Yahoo remains massively bloated, more like a government bureaucracy than a cutting-edge tech leader.
"A lot of people hid. There were all these employees [working remotely] and nobody knew they were still at Yahoo," the source told BI.
If that's true, Yahoo would be one of the few big firms that still remains overstaffed following a recession that forced many companies onto a crash diet. Yahoo has actually slimmed down, with its workforce falling from 13,600 employees in 2008 to about 11,500 now, according to company reports. That's a 15 percent decline. But revenue during that time has fallen by 31 percent. Yahoo isn't doing more with less, it's doing less with less. That's the problem Mayer was brought in to fix.
So even though Mayer hasn't come out and said so, there may still be far too many slackers on the Yahoo payroll. It might seem astonishing to millions of recession survivors that there are still people who get paid for surfing the web or goofing off, , but these amazing-if-true stories do surface from time to time. After new management took over ailing retailer J.C. Penney in 2011, they monitored company web traffic and found employees watched 5 million YouTube videos in just one month.
Overstaffing, not surprisingly, does seem to correlate with underperformance, which was certainly the case with Penney's. Yahoo's stock remains far below pre-recession levels, but it's up about 32 percent since Mayer took over as CEO last year. And it's a safe bet Yahoo employees are already spending a lot less time on YouTube.
Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
- Marissa Mayer