Internal “Peanut Butter” memo at Yahoo points to malaise

Brad Garlinghouse is the Senior Vice President at Yahoo, and runs Yahoo Mail. He has written a memo sharply critical of Yahoo, and it has been leaked to the WSJ. In it, he says Yahoo is adrift:

We have lost our passion to win. Far too many employees are “phoning” it in, lacking the passion and commitment to be a part of the solution. We sit idly by while — at all levels — employees are enabled to “hang around”. Where is the accountability?

His memo is a long one, but here is the crux, in his recommendation #3:

3. Execute a radical reorganization
a) The current business unit structure must go away.
b) We must dramatically decentralize and eliminate as much of the matrix as possible.
c) We must reduce our headcount by 15-20%.

I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can’t achieve this with baby step changes, We need to fundamentally rethink how we organize to win.

An accompanying WSJ article says Yahoo COO Dan Rosensweig has asked Garlinghouse to head a group to look into issues raised by the memo.