After a disappointing 14 months tenure as the Chief Operating Officer of Yahoo! Inc., Henrique de Castro has finally been relieved of his position. Yahoo Chief Executive Officer Marissa Mayer took the decision due to de Castro's failure to improve the company's revenue growth.
While Mayer may be disappointed and de Castro may be out of the job, the latter will still leave the company with a generous severance package. The announcement was first made known to Yahoo employees after Mayer sent out an internal company memo notifying Yahoo employees of the recent change. de Castro's dismissal will also come into effect Thursday. For now, no official word has been given regarding de Castro's replacement.
de Castro used to work for Google before joining Yahoo back in November 2012. He came on-board as the company's COO and was tasked with growing the company's revenues from advertising, among other things. de Castro's hiring was also personally advocated by Mayer, who was a former Google employee herself. To bring de Castro onboard, Mayer had offered him a handsome sum.
While Yahoo's high profile purchase of Tumblr for $1.1 billion took place under de Castro's watch, the deal has failed to boost the company's advertising revenues. The lack of growth surprised many technology analysts since online advertising was going through a period of growth at the time. While other companies such as Facebook, Google and Twitter were reporting impressive growths in ad-based revenues, Yahoo continued to fall by the wayside.
de Castro's dismissal is the first of its kind since Mayer took charge of Yahoo in 2012. And while the change may ultimately be for the better, the company's stock prices will undoubtedly be affected and a number of Wall Street pundits have already issued a hold notice on Yahoo stocks. Yahoo insiders have also stated that Mayer and de Castro have clashed numerous times during de Castro's tenure with the company.
While initial words on de Castro's dismissal was first circulated among Yahoo employees, the news of the sacking was finally confirmed after the company filed a report with the US. Securities and Exchange Commission (SEC). According to the report, de Castro will receive around $64.6 million as was specified in his contract when he first came on-board. At the time of reporting, de Castro has refrained from commenting on the matter.
