By the end of the year, over half of Yahoo’s ad tech personnel will be laid off, including nearly 1,000 workers this week.

As part of its effort to significantly restructure its ad tech sector, Yahoo said that it will be eliminating more than 20% of its whole workforce. By the end of the year, this round of layoffs will affect nearly half of the ad tech workforce, including nearly 1,000 workers this week, the business said. 

According to Yahoo, the decision will allow the company to concentrate its efforts and financial resources on its demand-side platform, or DSP, which is its primary ad business. Apollo Global Management, a private equity group, acquired the business in 2021 after purchasing Yahoo for $5 billion.

According to Reuters, the company’s round of layoffs occurs at a time when many advertisers are reducing their marketing budgets as a result of record-high inflation rates and worries about a recession. 

This year, a number of businesses, including Amazon and Google, have let go of thousands of employees. Yahoo is the latest in this long line.

The news was initially reported by Axios, which predicted that the layoffs will alter Yahoo’s long-running strategy of directly challenging Google and Meta for supremacy in digital advertising. Jim Lanzone, the CEO of Yahoo, claimed that strategy shifts rather than financial difficulties led to layoffs. The report quotes Lanzone as saying that these layoffs will be “very advantageous for the overall profitability of Yahoo.” It will enable the organization to make greater investments in other lucrative business ventures. 

It stated that 14% of the company’s anticipated employment cutbacks will be made in this phase, with the remaining 8% or more taking place in the second half of the year. Lanzone did not provide a precise figure.

On Thursday, the workforce received notice that 1,000 employees, or 12% of the company, would lose their jobs that day. Another 8%, or 600 individuals, will be let go in six months. Approximately half of Yahoo’s ad tech division will be affected by these cuts. 

According to Yahoo CEO Jim Lanzone in an interview with Axios, these layoffs are not the result of financial difficulties but rather deliberate decisions to bolster the underperforming Yahoo for Business advertising division. Yahoo makes money overall, bringing in about $8 billion a year.