As part of a significant restructuring, Yahoo intends to fire more than 20 percent of its 8,600 total employees.
The seasoned tech company is restructuring its advertising division, which by year's end will have lost more than half of its staff.
By the end of the week, the reductions will affect close to 1,000 workers.
As businesses battle a decline in demand, high inflation, and rising interest rates, Yahoo is the latest tech company to announce job losses.
Yahoo will be able to provide better value to its customers and partners thanks to these changes, according to a spokesperson. "These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run," the spokesperson told the BBC.
According to Yahoo, who has been owned by private equity firm Apollo Global Management since a $5 billion buyout in 2021, the move would allow the company to concentrate its efforts and investments on its DSP, or demand-side platform, or flagship ad business.
The layoffs are a part of a larger company initiative to improve efficiency in Yahoo's advertising division.
In response to record-high inflation rates and ongoing apprehension about a recession, many advertisers have reduced their marketing budgets.
The company's intention to stop directly competing with companies like Google and Facebook's Meta for dominance in digital advertising is indicated by the refocusing.
The new division will be known as Yahoo Advertising, simply put, the Yahoo spokesperson continued.
Relaunching dedicated ad sales teams for Yahoo's owned and operated properties, such as Yahoo Finance, Yahoo News, Yahoo Sports, and more, is part of our effort to increase our DSP efforts on an omni-channel basis. We will prioritize supporting our top global customers.
According to a report released on Thursday, layoffs in the US reached a more than two-year high in January as the once-reliable technology sector cut jobs at the second-fastest rate ever as it prepared for a potential recession.
As consumer and corporate spending decline in the wake of the pandemic amid high inflation and rising interest rates, businesses like Google, Amazon, and Meta are currently struggling with how to strike a balance between cost-cutting measures and the need to remain competitive.
Twitter cut about half of its staff after billionaire Elon Musk assumed control in October, and Meta CEO Mark Zuckerberg described recent layoffs as "the most difficult changes we've ever made at Meta."
