Sunnyvale, California, United States - August 12, 2018: the logo of the brand Yahoo isolated on white.

Yahoo to Lay Off 1,600 as Company Restructures Ad Tech Division

Representing about 20% of the company’s total workforce

Yahoo joins the ranks of tech companies laying off staff. Last week, Yahoo announced they would lay off 50% of their ad tech division, representing 20% of the company’s total workforce, or about 1,600 employees, Axios reports. The layoffs began immediately with about 1,000 positions, or 12%, cut last Thursday. The balance of the layoffs will occur in the second half of 2023. Domestic employees who lost their jobs will receive a severance package, but Yahoo did not specify what that package includes.

“Despite many years of effort and investment, this strategy was not profitable and struggled to live up to our high standards across the entire stack,” a Yahoo spokesperson said in a statement. “These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners.”

Layoffs not due to financial difficulties

Yahoo CEO Jim Lanzone said the layoffs were not due to financial difficulties, but the company needs to restructure the company’s business ad division which is not profitable. Axios says that Yahoo is shutting down Yahoo for Business, their supply-side platform (SSP), where publishers can sell automated ads within their content. Though Yahoo could sell the SSP, they will work with a variety of SSPs to maximize their ad revenue opportunities. Gizmodo reports that the intention of the SSP was to help Yahoo compete in the ad space monopolized by Google and Meta.

The company is also shutting down Gemini, Yahoo’s native advertising platform. Instead, Yahoo will leverage their relationship with new strategic partner Taboola, who will sell ads on their own content. In November, Yahoo announced they were entering a 30-year commercial agreement with Taboola who would use their native ad platform to reach nearly 900 million monthly active users worldwide. Yahoo acquired a minority stake in Taboola – 24.99% – as part of the deal.

Yahoo is now focused on the demand side platform business, which it is renaming Yahoo Advertising. In addition to these changes, Yahoo is relaunching dedicated ad sales teams for some of its divisions, including Yahoo Finance, Yahoo News and Yahoo Sports, says Gizmodo.

Apollo Global Management, Inc., a private equity firm, acquired Yahoo, previously known as Verizon Media, in September 2021. Verizon retained a 10% stake in Yahoo.

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Impacted employees reach out on LinkedIn

A number of impacted employees from Yahoo’s ad tech division took to LinkedIn last week to share they had lost their jobs and to ask their connections to key an eye out for other jobs.

“…And just like that, after 14 years, it’s my time to go. Layoffs are never easy, but in reflecting, my time here at Yahoo has been well spent. I’ve learned from some of the brightest minds in the digital / ad tech space, had countless opportunities to meet some of the coolest people, travelled to places I would have never thought and really at the end of the day – just had fun at my job that I built a career off of. Consider me blessed and now #opentowork.” ~ M. Horn

“Today, Yahoo! announced layoffs across the company and, unfortunately, I was one of the impacted workers. I recognize that I’m not alone in this situation, and know that the economy and environment in tech have been tough, but I never believed It would happen to me. Despite the situation, I appreciate all the experiences and wonderful people I’ve met and known at Yahoo!. I’ve been amazed and humbled by everyone’s support. I’d appreciate any leads, ideas, informal interviews, and referrals for opportunities in the field of digital marketing,” ~ S. Mohapatra

“I never thought I would be writing one of these posts, I know I have seen these before, the heartbreaking story of LAYOFF, and I used to think, yeah, that’s sad. I get it, but why post it? Hey, I got it today. This feeling is overwhelming. You want to go hug so many people and write so many recommendations, also cry because this sucks Time to edit the resume or take a break to remember how to breathe. I get it now because I am going through all of those things and emotions. I don’t know how to process any of it. Unfortunately, I’ve been impacted by the big layoff of Yahoo! One of the many 1000 employees and some of my favorite people I’ve ever worked with.” ~ A. Dasandhi

Insider Take

Yahoo is the latest in a growing line of tech companies that are rightsizing and restructuring. While Yahoo’s CEO says layoffs from the ad tech division isn’t related to financial difficulties, a failure to be profitable can become one quickly. As we’ve said before, it is unfortunate that employees have to bare the brunt of such restructuring. They are not just “laid off employees”; they are real people with bills and feelings. However, Yahoo is struggling to compete with tech behemoths Google and Meta. Yahoo has chosen to cut and run rather than continue to fight an uphill battle. We can see the logic in that.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

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