Yahoo to lay off more than 20% of staff in major revamp

Yahoo has announced that it will lay off more than 20 per cent of its total workforce as it aims to majorly restructure its ad tech division. This round of layoff will impact nearly half of the ad tech employees by the end of the year, including nearly 1,000 employees this week, the company stated. Yahoo said that the move will enable the company to narrow its focus and investment on its flagship ad business called DSP or demand-side platform. The company is owned by private equity firm Apollo Global Management after it bought out Yahoo in a $5 billion buyout in 2021. The company’s layoff round comes as many advertisers cut back their marketing budget due to record-high inflation rates and concerns about a recession, as per Reuters.  

Yahoo is the latest company in a long line of companies to lay off thousands of employees this year including the likes of Amazon and Google. Axios that reported the news first stated that the layoffs will change Yahoo’s years-long effort to compete directly with Google and Meta for digital advertising dominance. Yahoo CEO Jim Lanzone stated that the layoffs are not the result of financial challenges but rather strategic changes. Lanzone, according to the report, stated that these layoffs will be "tremendously beneficial for the profitability of Yahoo overall”. It will allow the company to invest more in other parts of business that are profitable. This round, it said, will see the lay off of 12 per cent of the planned job cuts at the company, while the remaining 8 per cent or more will occur in the second half of the year. Lanzone did not give a specific number of the employees who would be impacted but confirmed that it would impact more than 50 per cent of the ad tech unit’s current staff.