Yahoo announced Thursday that it will lay off more than 20% of its staff by the end of the year, including cutting 1,000 positions this week alone.
The company is seeking to streamline operations in its advertising unit, which has not been profitable. The company as a whole brings in roughly $8 billion in annual revenue, but is seeking to prioritize other areas, CEO Jim Lanzone told Axios.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” a Yahoo spokesperson said, according to CNBC.
Yahoo will shut down its advertising business and instead focus on its new partnership with Taboola to sell native advertising, Lanzone said.
In November, Yahoo took an almost 25% stake in Taboola in a 30-year commercial agreement.
“Over several years, the strategy of our ads business was to compete in the ad tech industry by offering a ‘unified stack’ consisting of our Demand Side Platform (DSP), Supply Side Platform (SSP) and Native platforms,” a Yahoo spokesperson said in a statement to TechCrunch. “Despite many years of effort and investment, this strategy was not profitable and struggled to live up to our high standards across the entire stack.”
In 2021, private-equity firm Apollo acquired Yahoo and AOL for $5 billion.