Layoffs have been a recurring theme in the tech sector, and it's sad to say that Yahoo is now one of the companies that are conducting workforce reductions. The first set of layoffs will affect 1,000 jobs, and the remaining 600 will also be cut by the second half of 2023.
Yahoo Layoffs
The company's 1,600 layoffs make up 20% of its global workforce. Although the number is not set in stone. According to CEO Jim Lanzone, it is only an approximation, so at the end of the day, there could be more or fewer job cuts.
The department that will be affected the most is the ad tech, wherein the layoffs will account for 50% of its staff. Lanzone reasoned that the reduction will be beneficial for the overall profitability of Yahoo, as mentioned in Gizmodo.
A spokesperson from Yahoo mentioned that the company's advertising initiatives were no longer profitable. The ad tech department, Yahoo for Business has been advertising for quite some time, which is why it has amassed huge data sets and more than 30 ad tech acquisitions.
Google's dominance in the digital ad market plays a huge part in Yahoo's downfall with it. Now, Yahoo is pouring its efforts into its demand platform business, now called "Yahoo Advertising," which allows advertisers to buy ads.
Reports say that Yahoo will also relaunch ad sales teams in some of its other sites like Yahoo Finance, Yahoo News, Yahoo Sports, and more. A spokesperson said that the move will strengthen its advertising business in the long run and deliver better value to customers and partners.
Yahoo Losing Its Place
Yahoo used to be one of the biggest tech companies, so much so that at its peak, it was worth more than Disney, Viacom, and News Corp combined, says former top sales Yahoo executive Jeremy Ring in his memoir. It's important to note that Yahoo was only five years old at the time.
The company was doing well with its business and acquisitions, and it was leading in most internet categories. One of its downsides is not putting more effort into its leads, like how Yahoo Briefcase, an online cloud storage, was surpassed by Dropbox and Google Drive.
Yahoo was the first to add news, sports, email, personal games, shopping, maps, and more. All of its competitors at the time are not even recognized by most anymore. Yahoo lost its touch soon after and missed one big opportunity after the next, as mentioned in Fast Company.
Perhaps one of the biggest missed opportunities was with Sergey Brin and Larry Page, the duo who found Google. The pair showed Yahoo co-founder David Filo the Google search-engine prototype, and Filo advised them to build it themselves.
The Yahoo co-founder introduced Brin and Page to an investor, which was Michael Moritz from Sequoia. Yahoo's then-CEO in 2002 Terry Semel tried buying Google for $3 billion, but Brin and Page wanted to sell it for $5 billion. Now, Google has surpassed the former tech giant, Yahoo.
