Yahoo, a tech giant, has announced that it will be cutting more than 20% of its total workforce of 8,600 employees as part of a major restructuring effort.
The company is revamping its advertising unit, resulting in over half of the department being eliminated by the end of the year. Approximately 1,000 employees will be impacted by the layoffs in the coming days.
The move comes as tech firms face challenges including declining demand, high inflation, and rising interest rates. Yahoo, now owned by private equity firm Apollo Global Management following a $5 billion buyout in 2021, says the restructuring will allow the company to concentrate its efforts and investments on its flagship advertising platform called DSP (Demand-Side Platform).
A spokesperson for Yahoo stated, “While these decisions are never easy, they are necessary to simplify and fortify our advertising business for the long term, and to provide better value to our customers and partners.”
Advertising Changes
Yahoo’s advertising unit is undergoing a streamlining process that involves layoffs, as part of a broader effort to simplify operations. This move is a response to the reduction of marketing budgets by advertisers, due to the current high inflation rates and ongoing economic uncertainty.
Yahoo’s decision to re-focus its efforts away from direct competition with tech giants like Google and Facebook’s Meta, shows a change in strategy in their pursuit of digital advertising dominance. The company has now established a new division, simply called “Yahoo Advertising.”
The new division will prioritize support for top global customers and dedicate ad sales teams to Yahoo’s owned properties, including Yahoo Finance, Yahoo News, Yahoo Sports, and more. They plan to redouble their efforts on the DSP on an omnichannel basis.
In January, the US saw a two-year high in layoffs, as the tech industry, once a stable source of employment, cut jobs in preparation for a possible recession. Companies such as Google, Amazon, and Meta are facing challenges in balancing cost-cutting measures with their need to remain competitive, as consumer and corporate spending decline due to high inflation and rising interest rates.
Meta CEO Mark Zuckerberg referred to recent job cuts as the “most difficult changes” in Meta’s history, while Twitter cut about half its staff after Elon Musk took control in October.