Yahoo will eliminate about 1,000 jobs beginning this week, or roughly 12 per cent of its employees, the first round of cuts in a larger plan to restructure its advertising technology division amid a wave of layoffs in the industry.
The company, owned by Apollo Global Management, plans to reduce headcount at its Yahoo for Business advertising technology unit by about 50 per cent by the end of 2023, or more than 20 per cent of the workforce at Yahoo, a company representative said.
“These changes announced today are entirely within the context of creating a better business plan for that division going forward,” chief executive Jim Lanzone said on Thursday in an interview.
“The company has taken many bites of the apple here in trying to make it work over the years, but as a stand-alone company, we had to take a very honest view in how we apply our resources.”
Digital advertising providers have had to grapple with skittish customers who are concerned about the uncertain economic climate.
Yahoo’s restructuring will create a new division called Yahoo Advertising, which will focus advertising sales teams on the company’s properties, including Yahoo Finance, Yahoo News and Yahoo Sports.
Tens of thousands of jobs have been cut in the technology sector in recent months amid rising interest rates and growing fears of a recession in the world's largest economy.
Companies such as Meta, Amazon, Microsoft and Google's parent Alphabet have axed staff after boosting hiring at the height of the Covid-19 pandemic.
Spotify, Twitter, IBM, Disney, PayPal and Dell are other major companies to have cut jobs in recent weeks.
While overall, companies in the US let go of 363,824 jobs in 2022, 13 per cent more than 2021, the technology sector was the leading job-cutting industry last year, according Chicago-based global employment company Challenger, Gray & Christmas.
A total of 97,171 jobs were cut in the technology sector last year, a 649 per cent increase from firings in the industry in 2021 — the highest since the “dot-com” crash that started in 2000, according to a survey by the company.
Yahoo is “very profitable,” Mr Lanzone said, adding that the job cuts were due more to the division’s restructuring than troubles in the advertising market.
“We would’ve made these changes even at the peak of the market,” he said.
Yahoo is “still hiring aggressively,” Mr Lanzone said, and employees who lose their jobs will be considered for other roles at the company.
Axios had reported the job cuts earlier.
