Yahoo Will Lay Off 20% of Staff
Laying off employees has become more like a trend for most tech companies in 2023 as they work on rejuvenating and restructuring. We see tech giants such as Google and Amazon laying off thousands of workers unexpectedly, leaving some of them devasted. If you've been following our stories, you know what I’m talking about. If you don’t, I recommend you check them out.
Layoffs are never an easy decision for any company and usually have significant effects on employees and their families. Some companies resort to layoffs as a cost-saving measure when economic hardships or when there is a shift in the industry. We see tech giants such as Google and Amazon laying off employees because there is a forecasted recession, and most of them site that they over-hired during the pandemic and hence they’re overstaffed.
Well, Yahoo has decided to follow suit, and it will be laying off 20% of its staff (1,600 employees). These employees will be in the ad tech business, TechCrunch. Adtech is the section at Yahoo that competes with Facebook and Google’s Meta. 12% (1000 employees) will be notified by Thursday before the end of the day, and in six months, the remaining 8% (600 employees) will then be dismissed.
Why is Yahoo Doing This?
Surprisingly Jim Lanzone the CEO of Yahoo, in an interview with Axios, mentioned that the layoffs are not a result of economic issues. In fact, Yahoo is a very profitable company that earns over 8 billion in yearly revenue overall. he further mentioned that these were changes that looked at strengthening the Yahoo for Business advertising unit, which was unprofitable.
Jim Lanzone further elaborated and gave more insight into the company's previous plan. He mentioned that the main strategy with their ads business was to become a major competitor in the ad tech industry, offering a unified stack. The unified stack was to consist of Supply-Side platforms (SSP), native platforms, and Demand-Side Platforms (DSP). He went on to mention that this strategy wasn't profitable and was struggling to meet high standards in the entire stack.
Lanzone mentioned that the ad-tech division will be focusing on deals with Fortune 500 companies. In November, Yahoo joined together with the network Taboola by taking up a 25% stake in advertising. Taboola is now the company's native advertising partner and has a 30-year agreement with Yahoo. Yahoo will be shutting down its supply-side platform (SSP) and its native advertising platforms such as Gemini. According to Lanzone, these changes will increase yahoo's competition ad placements eight times and more.
Yahoo is still around? About useless as Bing now.