Yahoo, once a leading internet giant of the 1990s, has become the latest tech firm to announce significant cuts to its workforce.
In an interview with Axios, Yahoo CEO Jim Lanzone explained that the significant restructuring of its advertising unit — meant to allow the company “to go on offense” — will result in the layoff of over 20% of its workforce by 2023. Approximately 1,000 of these cuts are expected to be made by the close of the week.
The private equity firm, Apollo Global Management, purchased 90% of Yahoo from Verizon in September 2021 and effectively moved the company out of China, as The Dallas Express previously reported.
The latest news from Yahoo comes at a time when other tech companies have made headlines — including Spotify, Google, and Microsoft — for taking similar measures to cut costs as a result of the economic downturn. Yet Yahoo’s Lanzone insists that the company’s layoffs are strategic, as it aims to streamline its Yahoo for Business advertising unit.
With this in mind, Yahoo will focus its efforts on its 30-year partnership with Taboola, a digital advertising company that Yahoo bought a nearly 25% share of last year, to provide ad services, CNBC reported. Lanzone explained to Axios that this will enable Yahoo to increase the competition for ad placements eight times over.
However, due to this transition, Yahoo will be closing down its native advertising platforms such as Gemini, and its supply-side platform. The company will also be focusing on its demand-side marketplace, which will now be called Yahoo Advertising. This division will be devoted to deals with Fortune 500 companies.
Yahoo’s restructuring efforts come after decades of decline after being eclipsed by Google, with its high-performing search and social media platforms, such as Instagram, Facebook, and YouTube.
Nonetheless, Lanzone also told Axios that he is optimistic about the future profitability of the company.
