Over 20% of Yahoo’s 8,600 employees will be let go as part of a significant restructuring. The seasoned tech company is restructuring its advertising division, which will lose more than half of its staff by year’s end.
By the end of the week, the cuts will have a significant impact on close to 1,000 employees.
The latest tech company to announce job cuts is Yahoo as businesses battle a decline in demand, high inflation, and rising interest rates.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” a spokesperson told the BBC.
In addition, the move would allow Yahoo, which has been owned by private equity firm Apollo Global Management since a $5 billion buyout in 2021, to concentrate its efforts and investments on its core DSP, or demand-side platform, ad business.
The company’s effort to streamline operations in Yahoo’s advertising division includes the layoffs.
It comes at a time when many advertisers have reduced their marketing budgets in response to all-time high inflation rates and ongoing recession uncertainty.
The company’s intention to stop directly competing for dominance in digital advertising with companies like Google and Facebook’s Meta is indicated by the refocusing.
“The new division will be called simply Yahoo Advertising,” the Yahoo spokesperson continued.
“In redoubling our efforts on the DSP on an omni-channel basis, we will prioritise support for our top global customers and re-launch dedicated ad sales teams towards Yahoo’s owned and operated properties – including Yahoo Finance, Yahoo News, Yahoo Sports and more.”
As the once-reliable technology sector cut jobs at the second-highest rate ever in order to prepare for a potential recession, layoffs in the US reached a more than two-year high in January, according to a report released on Thursday.
Following the pandemic, consumer and corporate spending are declining amid high inflation and rising interest rates, and businesses like Google, Amazon, and Meta are now attempting to strike a balance between cost-cutting measures and the need to remain competitive.
The recent layoffs at Meta, according to chief executive Mark Zuckerberg, were “the most difficult changes we’ve ever made at Meta,” while Twitter cut about half of its staff after billionaire Elon Musk assumed control in October.
(Adapted from BBC.com)