Yahoo has become the latest tech giant to announce huge job losses, as the cost of living crisis forces digital advertisers to reign back on their spending.
The US web provider said it is laying off more than 20 percent of its entire workforce, with cuts expected to make 1,600 current employees redundant, including 1,000 this week, Axios heard yesterday.
Not because of financial struggles, according to boss Jim Lanzon in an interview with Axios, but as a result of Yahoo’s restructuring of its unprofitable ‘Yahoo for Business’ advertising subdivision.
CNBC reported that tech companies had laid off more than 70,000 workers in the 12 months ending in January. Ale
Lanzon said the move would be “hugely beneficial” to Yahoo’s overall earnings success.
Yahoo Enterprise generates annual revenue of around $8bn (£6.6bn).
In a restructuring effort, Yahoo plans to cancel its supply-side platform (SSP), the part of its advertising business that allows online publishers to monetize their digital content with ads.
Instead the tech firm will shift its focus to its demand-side platform (DSP), rebranding it as ‘Yahoo Advertising’, which helps advertisers by automating the ad-buying process across multiple sites.
Many advertisers are cutting back on spending as inflation puts pressure on companies and the economic outlook remains bleak.
Yahoo, owned by Apollo Global Management, joined the ranks of tech companies laying off employees after laying off many of them during the pandemic and finding themselves again in need of thinning.
Microsoft cut 10,000 jobs in January, accusing it of cutting the company’s spending on technology, while Amazon cut 17,000 jobs in the same month.
Streaming service Spotify cut 600, while earlier this month eBay said it was shedding 500 jobs.
