Yahoo to lay off more than 20% of staff to restructure its ad-tech unit

US-based technology company Yahoo is reportedly planning to lay off more than 20% of its total workforce as part of a restructuring of its ad tech division.  

The cuts will impact nearly 50% of Yahoo's ad tech employees by the end of this year, including nearly 1,600 employees this week, according to a report by news website Axios that first reported about the layoffs. 

The report further said that this round will see the layoff of 12% of the planned job cuts at the company, while the remaining 8% or more will occur in the second half of the year.  

Yahoo is owned by private equity firm Apollo Global Management since a $5 billion buyout in September 2021.  

In an interview with Axios, published on February 9, Yahoo CEO Jim Lanzone said that these changes will allow Yahoo to increase competition for ad placements eight times over — but as a result of this transition, Yahoo will shut down native advertising platforms like Gemini and its supply-side platform (SSP).   

Yahoo will also focus on its flagship ad business called demand-side platform (DSP), which will be renamed Yahoo Advertising. This division will focus on deals with Fortune 500 companies, he said. 

The CEOs announcement comes as many advertisers have cut down their marketing budgets in response to high inflation rates and continued uncertainty about a recession.  

Notably, Yahoo is the latest company in to join the layoff bandwagon among technology firms in the US that are slashing thousands of employees in recent months including the likes of Amazon, Meta and Alphabet, who have been competing on their digital advertising dominance.   

Lanzone, however, said that these layoffs are not a result of economic issues, but rather, they are intentional changes to strengthen the unprofitable Yahoo for Business advertising unit. He added that on the whole, Yahoo is profitable, earning around $8 billion in yearly revenue.  

In November 2022, Yahoo took an almost 25% stake in advertising network Taboola, which is now the company’s native advertising partner in a 30-year commercial agreement.