Yahoo is preparing for a round of layoffs, with plans to eliminate 1,000 jobs now and up to 600 in the second half of 2023.
First reported by Axios, Yahoo’s layoffs will impact roughly 20% of the company’s workforce. Unlike many of the tech industry’s recent layoffs, Yahoo CEO Jim Lanzone said the decision was not a result of financial issues, but is simply part of a larger restructuring.
“The moves are meant to simplify and strengthen the good parts of the business, while sunsetting the rest,” Lanzone said.
As part of the company’s restructuring, Yahoo will be shutting down portions of its advertising business, which has long been outclassed by both Google and Meta. As a result, while the rest of the business is quite profitable, the advertising business has increasingly been an anchor that is dragging the company down.
“A lot of resources were going into that unified stack without a return,” Lanzone added. “This was a longstanding issue with every variation of this company … that needed to be solved eventually.”
Lanzone says the move will be “tremendously beneficial for the profitability of Yahoo overall,” and will help the company “to go on offense” in more profitable areas.
The move comes at a time when Yahoo is teasing a return to the search market, so it will be interesting to see if getting back to the company’s roots is an area where Lanzone plans “to go on offense.”