Yahoo Plans to Cut a 5th of Its Workforce

Yahoo has become the latest tech giant to announce mass layoffs—and the ax will not be swinging evenly. The company says it plans to lay off around 1,700 people, a fifth of its workforce, by the end of the year. The cuts will start with 1,000 by the end of this week, and the company's business ad tech unit will be hit hardest, CBS reports. Yahoo said it plans to cut around 50% of the workforce of the unprofitable Yahoo for Business unit, which has not delivered the results the company was expecting, reports CNET. Yahoo was combined with AOL and sold by Verizon to private equity firm Apollo Global Management for $5 billion in 2021.

Yahoo CEO Jim Lanzone tells Axios that the move is a change in strategy, not a response to financial challenges. The step back from the ad tech unit will be "tremendously beneficial for the profitability of Yahoo overall" because it will allow the company to focus on other aspects of the business, he said. Yahoo and AOL bought around 30 ad tech businesses over more than a decade, but attempts to combine the two companies' ad units into a unified ad platform that could rival Google did not work out. "A lot of resources were going into that unified stack without a return," Lanzone says. He says Yahoo plans to shut down its Gemini ad platform and build on its new partnership with Taboola. (More Yahoo stories.)