Yahoo plans to lay off more than 20% of its 8,600 employees as part of a major restructuring.
The veteran tech company is reorganizing its advertising division, which will lose more than half the division by the end of the year.
Almost 1,000 employees will be affected by the cuts by the end of the week.
Yahoo is the latest tech company to announce job cuts as companies grapple with slowing demand, high inflation and rising interest rates.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business over the long term, while allowing Yahoo to deliver better value to our customers and partners,” said a spokesman for the BBC.
Yahoo, which has been owned by private equity firm Apollo Global Management since a $5 billion buyout in 2021, added that the move would allow the company to shift its focus and investment to its flagship ads business called DSP or demand-side platform restrict.
The layoffs are part of the company’s broader effort to streamline operations at Yahoo’s advertising unit.
This is because many advertisers have slashed their marketing budgets in response to record-high inflation rates and ongoing uncertainty about a recession.
The realignment signals the company’s intent to no longer compete directly against the likes of Google and Facebook’s Meta for digital advertising supremacy.
The Yahoo spokesman added: “The new division will be called – simply – Yahoo Advertising.
“By redoubling our efforts on the DSP on an omni-channel basis, we will prioritize support for our key global clients and relaunch dedicated ad sales teams for Yahoo’s owned and operated properties – including Yahoo Finance, Yahoo News, Yahoo Sports and more .”
- What is behind the job cuts at the big tech companies?
- Are tech job cuts a warning for the broader economy?
Layoffs in the US hit a more than two-year high in January as the tech industry, once a reliable source of jobs, shed jobs at the second-fastest pace on record to brace for a possible recession, a report showed on Thursday.
Companies like Google, Amazon and Meta are now struggling to balance cost-cutting measures with the need to remain competitive as consumer and business spending shrink amid high post-pandemic inflation and rising interest rates.
Meta CEO Mark Zuckerberg said the recent job cuts were “the most difficult changes we’ve made in Meta’s history,” while Twitter cut about half of its workforce after multibillionaire Elon Musk took control in October.
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