The changes will be “extremely beneficial to Yahoo’s overall profitability” and allow the company to invest more in its other, profitable divisions, Yahoo CEO Jim Lanzone said.
Yahoo plans to lay off more than 20% of its workforce as it moves ahead with a major restructuring of its ad tech division, according to the website Axios.
The cuts will affect almost 50% of those employed in this department, i.e. more than 1,600 people.
The move means Yahoo will end its years-long effort to compete with Google and Meta in the digital advertising space.
Yahoo CEO Jim Lanzone, in an interview, said the layoffs are not due to financial challenges the company is facing but to strategic changes it wants to bring to the unprofitable Yahoo for Business advertising division.
The changes will be “extremely beneficial to Yahoo’s overall profitability” and will allow the company to invest more in its other, profitable divisions.
Yahoo as a whole is profitable, with annual revenue of about $8 billion.
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