Yahoo Follows Many Tech Companies Who Are Laying off Employees

Due to global economic impact, big tech companies continue to downsize their teams' workforce. Yahoo, a big tech company that generates roughly $8 billion in annual revenue, is not exempted as they follow such recently. 

Yesterday, Yahoo CEO Jim Lanzone said they would remove 20% of staff as it is not helpful to the industry. Now, this question runs in the mind of the employees working with Yahoo.

Who's going to stay, and who will be laid off? While the company decision sounds harsh, it came with reasons which are seen below.

What Is Yahoo CEO Saying About the Laying off of His Employees?

Axios interviewed Yahoo CEO Jim Lanzone, who made it known that the decision was not due to financial challenges but was implemented to reduce the effort in financing the Yahoo for Business advertising unit, which is no longer profitable.

He said, “This development will be tremendously beneficial for the profitability of Yahoo overall, which will allow the company to go on offense to put more in the profitable part of its business.” 

Due to this impact, over 1000 positions will be eliminated on Thursday, representing 12%, and the remaining 8% will take effect from the year's second half.

Also, in the interview, Lanzone made it known that they will be future cuts, but he is still determining the number that will be affected.

In that vein, he said that 50% of the ad tech unit's staff and 20% of Yahoo's staff would also be affected during this time.

Will the Laying off of Employees Affect Yahoo or Boost Its Productivity?

This downsizing won’t affect Yahoo's productivity as it will focus more on arrears that generate more revenue. With the current rise in inflation globally, it wouldn't be wise to invest in places that don't produce results.

Sadly, a thousand and more people will lose their jobs in this decision. That said, Yahoo CEO Jim Lanzone said the company would be focusing on Yahoo DSP or demand-side platform, which is said to be one of the major parts that attract more revenue. 

In his words, “Our DSP is world class and does billions in revenue," Lanzone said. Still, in the interview with Axios, he said the company would employ more workforce in the Yahoo DSP. 

The demand-side platform assists advertisers in purchasing ads across different publishers' websites, generating billions of dollars in revenue. On the other note, Yahoo will shut down its SSP, or supply-side platform.

Why Is Yahoo Shutting Down Its Supply-Side Platform (SSP)?

Yahoo is shutting down the SSP, or supply-side platform, alongside Gemini after the company noticed that they were spending more money and receiving less revenue from this channel.

“Yahoo SSP, which assists digital publishers to sell automated ads against their content, will be shutting down alongside Gemini while we leverage Taboola,” Lanzone said. 

The company also said that it was shutting down its SSP because its reliance on its SSP and native ad tech businesses negatively impacted Yahoo's ability to monetize those channels. 

Moving on, Yahoo will focus more on Taboola, which is said to increase the number of advertisers competing for ad placement on Yahoo properties by 8x. 

Conclusion 

Even as the trend of layoffs rises, every company has its reasons for such a decision. It's not a good tale of losing your job at such a time when inflation is on the increase, but what else can one do?

Yahoo clearly stated that the major reason for cutting off their employees in the ad tech unit is for restructuring. 

According to Yahoo, they were spending more money on some channels which are not productive, and to restructure it, a thousand staff will be affected this week, making it 12%, while 8% will leave in the second half of the year.

In the breakdown, 50% of the ad tech unit will be laid off, while 20% of Yahoo's current staff will also be stripped of their duties.