Big Tech Layoff Wave... Yahoo to Cut 20% of Total Workforce

[Asia Economy Reporter Yujin Cho] Yahoo announced on the 9th (local time) that it will begin a high-intensity restructuring, laying off more than 20% of its total workforce, focusing on the advertising technology sector.

According to major foreign media such as Axios, Yahoo plans to lay off 1,000 employees in the advertising technology department on the same day and reduce a total of 1,600 employees (about 50%) by the end of the year. The scale of layoffs centered on the advertising technology department amounts to about 20% of the entire workforce.

The company stated that this reduction is aimed at improving the profitability of the advertising business. CEO Jim Lanzone said, "This layoff is not due to financial difficulties but to streamline the operations of the advertising division," adding, "This restructuring will contribute to improving Yahoo's overall profitability and increase the room for investment in other profitable businesses."

[Image source=AP Yonhap News]

Apollo Global Management, a private equity firm and the largest shareholder of Yahoo, purchased a 90% stake in the media business unit encompassing Yahoo and America Online (AOL) from U.S. telecom company Verizon in 2021. Since then, it has focused on the advertising platform business and reorganized its business structure, but has struggled against leading companies such as Google and Meta.

As the global economic recession leads companies to reduce marketing budgets, layoffs continue among big tech companies specializing in online advertising. U.S. economic media CNBC recently reported that big tech companies such as Amazon, Meta, Twitter, and Microsoft (MS) have cut about 60,000 jobs since last year in response to the recession.

MS announced last month that it would lay off 10,000 employees, mainly in the technology sector, and Amazon laid off more than 18,000 employees, nearly double the previously announced layoff scale of 10,000.

Meta, Facebook's parent company, announced layoffs of 11,000 employees; Twitter, 3,700; and customer relationship management (CRM) software company Salesforce announced or is planning to lay off 7,000 employees.