Yahoo laying off 20% of its employees, most of which belong to its ad-tech unit
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Yahoo laying off 20% of its employees, most of which belong to its ad-tech unit
Layoffs have become the new norm among tech giants. Today, Yahoo announced its plans to lay off over 20% of its employees in an effort to restructure its ad-tech unit.
There have been several big companies like GitHub, Amazon, Google, and PayPal, among others who have recently eliminated thousands of employees from their workforces. Yahoo has joined the list and announced that around 1600 people, which is 50% of the company’s ad-tech unit, will be laid off.
In a report by Axios, Yahoo executives highlighted that the decision would be “tremendously beneficial for the profitability of Yahoo overall”. CEO Jim Lanzone suggested that the company hopes to invest its resources in more profitable parts of the business as he mentioned, “It was too resource intensive to do everything at once.” Lanzone also clarified that the decision to lay off employees was not attributable to financial challenges being faced by the company, instead, it is a strategic change, since, it eradicates Yahoo’s direct competition with Meta and Google for dominance in digital advertising.
On Thursday, 12% of employees, totaling around 1000 people, would be laid off while the other 8% will be laid off in the second half of 2023. However, the exact number is not yet confirmed. Yahoo will shut down its supply-side platform, which is part of its advertising business. It will also close Gemini, its native ad platform delivering sponsored content for brands, and instead prioritize its new partnership with Taboola, which will lead to an increase in the number of competitors seeking ad placements on Yahoo properties by 8x according to Lanzone.
With the current decision, Yahoo does not plan to exit the advertising business altogether. It aims to focus more on its demand-side platform, which will be renamed Yahoo Advertising. According to Elizabeth Herbst-Brady, the chief revenue officer at Yahoo, the company will prioritize selling to premium accounts and Fortune 500 businesses by forming a premium ad sales team on Yahoo properties like Yahoo News, Yahoo Mail, etc.
Source: Axios
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