Yahoo on Thursday hinted at its plan to layoff more than twenty percent of its workforce as a part of a significant restructuring of its ad tech division, according to Reuters.

Furthermore, this week, the company announced layoffs of over a thousand employees, including fifty percent of its ad tech staff. The company said the move would focus on its main flagship demand-side platform (DSP) ad business. Experts expect that Yahoo will end its years-long effort to compete directly with Google and Meta for digital advertising dominance through these changes

Yahoo CEO Jim Lanzone said layoffs were due to strategic changes, not finances. These changes will be tremendously beneficial for the profitability of the company. They will allow the company to go on offense and invest more in other profitable parts of its business. Axios reports that Yahoo is profitable and brings in roughly $8 billion in annual revenue.

According to Axios, Yahoo will freeze approximately 1000 positions on Thursday, representing 12% of the planned layoffs. The remaining eight percent or more cuts will occur in the second half of this year. Lanzone said he couldn’t provide the exact number of future cuts. He confirmed that the total number of layoffs would amount to more than fifty percent of the ad tech unit’s current staff and more than twenty percent of Yahoo’s current staff.


Additionally, as part of the changes, Yahoo will shut down a part of its advertising business called SSP, or supply-side platform, and double down on the part of its ad business called DSP, or demand-side platform that helps buyers buy ads in an automated fashion across multiple publisher websites. The DSP will be renamed Yahoo Advertising.


Lanzone plans to hire more roles and make more acquisitions to grow Yahoo’s DSP in the coming months. “Our DSP is world class and does billions in revenue”, he told Axios. Investing in DsP will help Yahoo focus on growing its properties as standalone brands, a key Apollo strategy.
Finally, Apollo Global Management bought Yahoo and AOL from Verizon in 2021 for $5 billion.