Yahoo will be laying off more than 20% of its overall workforce and restructuring its ad tech business, impacting more than 1,600 employees, Axios reports.
The layoffs will cut more than 50% of Yahoo’s ad tech employees, Axios reported Thursday, citing executives from the IT company. Yahoo is not suffering financial difficulties and the layoffs are part of a strategic shift, Yahoo CEO Jim Lanzone told the outlet.
“The moves are meant to simplify and strengthen the good parts of the business, while sunsetting the rest,” he said.
An estimated 1,000 employees were laid off Thursday and the remaining cuts will occur later in 2023, according to Axios. It’s unclear what benefits package the fired employees will receive.
🚨Exclusive: @Yahoo to lay off more than 20% of staff as it shrinks ad biz
— More than 1600 employees will be impacted
— 50% of Yahoo’s ad tech unit being cut https://t.co/VPUw5yfKwP
— Sara Fischer (@sarafischer) February 9, 2023
The changes will be “tremendously beneficial for the profitability of Yahoo overall,” Lanzone said, according to the outlet. He said Yahoo will be able “to go on offense” and invest in its profitable businesses. Yahoo is reportedly profitable and brings in roughly $8 billion per year in revenue. (RELATED: NBC News, MSNBC Staffers Threaten To Walk Out Over Layoffs)
Lanzone was hired in 2021 when Verizon sold Yahoo to private equity firm Apollo, which also acquired AOL and put it under the Yahoo umbrella. Yahoo and AOL previously made more than 30 ad tech-related acquisitions, and Verizon had tried to use the two companies to rival Google and Facebook’s digital ad dominance.
Yahoo will sell advertising on its own content with Taboola, an ad tech giant that formed a 30-year partnership with Yahoo on Jan. 17. The company will continue running part of its ad business focused on the demand side, where Yahoo assists advertisers with buying digital ads across multiple websites.