Over 20% of Yahoo’s 8,600 employees will be laid off as part of a massive restructuring. The renowned IT giant 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 major impact on close to 1,000 employees.
The latest major company to announce job cuts is Yahoo as businesses battle a decline in demand, soaring inflation, and rising interest rates.
A spokeswoman told the BBC: “These decisions are never simple, but we believe these changes will strengthen and simplify our advertising business over time, while enabling Yahoo to deliver better value to our consumers and partners.”
In addition, the move would allow Yahoo, which has been owned by private equity firm Apollo Global Management since a $5 billion takeover in 2021, to concentrate its efforts and investments on its core DSP, or demand-side platform, ad business.
The company’s effort to simplify in Yahoo’s advertising division includes the layoffs. It comes at a time when many advertisers have reduced their marketing budgets in reaction to all-time high inflation rates and ongoing recession uncertainty. The company’s goal to avoid directly vying for dominance in digital advertising with companies like Google and Facebook’s Meta is evidenced by the refocusing.
“The new division will be called simply Yahoo Advertising,” the Yahoo official continued.
Following the epidemic, 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.