Yahoo is significantly scaling back its investments in advertising technology and will lay off about 1,600 employees, or 20% of its workforce, as part of the shift in strategy.
One of the original tech names, the company is now 90% owned by private equity firm Apollo Global Management, which acquired it from Verizon in 2021.
About half of the company’s Yahoo for Business unit, which had scaled up efforts in ad tech, will be cut. About 1,000 of the layoffs will take effect by the end of this week, with the remainder due by year-end.
In a statement to Deadline, a Yahoo spokesperson said that for the past several years, “the strategy of our ads business was to compete in the ad tech industry by offering a ‘unified stack’ consisting of our Demand Side Platform, Supply Side Platform and Native platforms. Despite many years of effort and investment, this strategy was not profitable and struggled to live up to our high standards across the entire stack.”
Moving forward, the statement continued, the company will focus solely on its DSP holdings, which have “high-growth potential.” The renamed division will be known as Yahoo Advertising.
Axios was the first to report the news of the layoffs. Yahoo CEO Jim Lanzone said the staff reductions would allow the company to “go on offense” and invest in parts of its business delivering stronger returns.
“These decisions are never easy,” the company’s statement concluded, “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.”
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