Either way, you're right about needing to open it back up. The impact to morale overall must have been huge when these people had to scramble to protect their livelihood.
* [1] http://www.businessinsider.com/ex-yahoos-confess-marissa-may...
Well... if you have, say, 80 people working for you, and you discover 15 are dead weight... cutting them would mean you can do your division's job with 65 people. You wouldn't have any room to argue for budget increase. That's a cynical view, but one I've seen played out a couple of times over the years in my travels.
VPN usage statistics. We have to take Y!'s word for it, but most news stories about the policy change say that Mayer looked at usage statistics to find that many work-from-home employees were working less than full time. I can't find a cite right now, but I thought I read that several employees would go weeks without logging in once.
Shitty Yahoo products.
Mayer did not trust them, and hence her fiat action of banning working from home.
That said, I think it was a poor choice to abolish the WFH policy.
How do you tell whether or not they're actually working when they're in the office?
It's easy for them to measure office hours or lines of code or commits or bugs fixed, etc. This does not logically imply that the person is actually doing any "real" work but it creates the perception and it's easy to measure and so managers are fond of it.
At the end of the day you need to manage the perception that you're working or not working. When you're not working in an office it's even worse. You just lost the easiest way: creating the perception that you "put in the hours". Don't make this difficult for your manager. That's my experience anyway.
I would say there's a more universal difficulty of understanding the productivity of jobs different from our own.
Surely a design or QA lead would easily detect when someone is not actually working?
When QA does not work, there will be very few bug reports, and your support will see the number of tickets shoot up.
But you must have some process in place to really identify the bottleneck. Something I assume a big company should have.