Yahoo has announced that it is laying off 20% of its staff, or about 1,600, becoming the latest technology company to trim down its headcount in what has become somewhat of a daily trend.
The layoffs will be done throughout the year in what the company described as a restructuring of its ad tech unit.
According to CNN, the company’s legacy ad tech division, Yahoo for Business, will be overhauled and transformed into a new division called Yahoo Advertising. As a result of the change, the tech company plans to cut nearly 50% of the division this year, “including nearly 1,000 employees this week”.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” said a Yahoo spokesperson.
Axios reports that the changes will end Yahoo’s years-long effort to compete directly with Google and Meta for digital advertising dominance and will instead seek to double down on its demand-side advertising platform which helps advertisers buy ads in an automated fashion across multiple publisher websites.
For his part, Yahoo CEO Jim Lanzone stressed that unlike with other big tech layoffs of late, the company’s layoffs were not as a result of financial challenges but about “strategic changes to the company’s Yahoo for Business advertising unit, which is not profitable”.
According to its latest financial figures, Yahoo, which was acquired in 2021 from Verizon by Apollo, a global private-equity firm, for $5 billion, is profitable and brings in roughly $8 billion in annual revenue.