(USNewsMag.com) – The seasoned IT giant, Yahoo, is restructuring its advertising division, which will lose over half its staff by year’s end.
Yahoo is the latest major company to announce job cuts as businesses battle declining demand, soaring inflation, and increasing interest rates.
The layoffs come when many marketers have reduced their marketing spending due to all-time high inflation rates and ongoing economic uncertainties.
By the end of the week, layoffs will significantly impact close to 1,000 workers. Over 20% of Yahoo’s 8,600 employees will be let go as part of this significant restructuring.
The move would allow Yahoo, controlled by private equity firm Apollo Global Management since a $5 billion takeover in 2021, to concentrate its efforts and investments on its core DSP, or demand-side platform, ad business. The refocusing indicates the company’s goal to avoid directly vying for supremacy in digital advertising with companies like Google and Facebook’s Meta.
A spokeswoman said that “these choices are never simple.” Yahoo thinks these changes will strengthen and simplify its advertising business over time while allowing Yahoo to offer greater value to its consumers and partners.
“The new segment will be called Yahoo Advertising,” the official said.
Yahoo vows to “prioritize support for our top worldwide clients and re-launch dedicated ad sales teams for Yahoo’s owned and controlled sites, including Yahoo Finance, Yahoo News, Yahoo Sports, and more,” the company said.
According to a study released on Thursday, layoffs in IT in the US reached a more than two-year high in January.
Following the epidemic, consumer and corporate expenditures are declining amid high inflation and increasing interest rates, and businesses like Google, Amazon, and Meta are now attempting to strike a balance between cost-cutting measures and the need to stay competitive.
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