Yahoo, the parent company of TechCrunch, has announced layoffs impacting 1,600 employees in its ad tech business. The company is cutting 20% of its staff, with 12% of employees being laid off immediately and another 8% to be let go in six months. The cuts will affect approximately half of Yahoo’s ad tech business.
According to Yahoo CEO Jim Lanzone, the layoffs are not due to economic issues but are intentional changes aimed at improving the unprofitable Yahoo for Business advertising unit. Despite the cuts, Yahoo remains a profitable company, earning around $8 billion in yearly revenue.
In November, Yahoo took a 25% stake in advertising network Taboola and signed a 30-year commercial agreement, making Taboola its native advertising partner. Lanzone stated that these changes will enable Yahoo to increase competition for ad placements by eight times. As a result, native advertising platforms like Gemini and its supply-side platform (SSP) will be shut down, and the demand-side platform (DSP) will be renamed to Yahoo Advertising, focusing on deals with Fortune 500 companies.
The layoffs come after private equity firm Apollo Global Management completed its $5 billion acquisition of Yahoo, formerly known as Verizon Media Group, in 2021.