Yahoo announces layoffs of 20 percent of staff by end of 2023

Yahoo has announced plans to lay off more than 20 percent of its staff by the end of the year as it conducts a restructuring of its ad tech unit, multiple outlets reported. 

Axios was the first to report the layoffs and a Yahoo spokesperson confirmed them to The Hill. Yahoo CEO Jim Lanzone told Axios the layoffs are not a result of financial difficulties but instead strategic changes to the advertising unit, which has not been profitable. 

The layoffs will affect more than 1,600 employees in advertising technology, Axios reported.

Yahoo told The Hill that the figure is equal to almost half of the unit.

Lanzone told Axios that the changes will be “tremendously beneficial for the profitability” of Yahoo, allowing it to invest more heavily in other parts of the company that are more profitable. 

Axios reported that the change will end Yahoo’s effort to try to keep up with Google and Meta, the parent company of Facebook, with digital advertising. 

The company eliminated 1,000 positions on Thursday, and the remaining layoffs will happen in the second half of the year. 

“This was a longstanding issue with every variation of this company … that needed to be solved eventually,” Lanzone said. 

Axios reported the company still plans to increase its involvement with part of its advertising business, called its demand-side platform, which helps advertisers buy ads on multiple publisher websites. That business will be renamed Yahoo Advertising. 

Yahoo will shut down its supply-side platform, which has helped digital publishers sell automated ads. 

“The moves are meant to simplify and strengthen the good parts of the business, while sunsetting the rest,” Lanzone said. 

The moves come as many Big Tech companies have conducted widespread layoffs because of financial struggles, unlike Yahoo. Those companies include Amazon, Meta and Twitter.

Updated at 4:04 p.m.