Yahoo has announced that it will be laying off over 1,600 people, about 20% of its workforce. CEO Jim Lazone said in an interview that the cuts are not stemming from financial issues, but instead from key changes to the unprofitable Yahoo for Business advertising unit.
Why it matters: In the grand scheme of things, the changes will put an end to Yahoo’s aspirations of competing directly with Meta and Google for digital advertising dominance. The company’s reliance on its native ad tech business and supply-side platform (SSP) adversely affected its ability to monetize the channels.
- Yahoo is cutting more than 50% of their ad tech employees – 1,000 positions were eliminated Thursday with the other 600 or so occurring in the latter half of the year.
- The company’s demand-side platform, otherwise known as DSP, which helps advertisers purchase ads automatically across multiple publisher websites will be renamed to Yahoo Advertising. This confirms that Yahoo is not getting out of ad tech completely, but rather, pivoting accordingly to a side of the business that earns billions in revenue.