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Yahoo has become the latest tech giant to announce massive layoffs, as it works to restructure its advertising technology division. 

The company announce on Thursday it plans to lay off more than 20 percent of its total workforce, affecting nearly half of Yahoo’s ad tech employees by the end of the year — including nearly 1,000 employees this week.

CEO Jim Lanzone told Axios the layoffs are not due to financial challenges, but rather strategic changes to the company’s Yahoo for Business advertising unit, which he says is not profitable. 

The move comes as many advertisers have pared back their marketing budgets in response to record-high inflation rates and continued uncertainty about a recession.

With the announcement Thursday, Yahoo is just the latest in a string of technology companies to announce layoffs, wiping out thousands of jobs that pay a combined $12 billion annually.

Yahoo CEO Jim Lanzone announced on Thursday that the company will lay off more than 20 percent of its staff as it restructures its advertising unit

Yahoo CEO Jim Lanzone announced on Thursday that the company will lay off more than 20 percent of its staff as it restructures its advertising unit

The job cuts will affect nearly half of Yahoo's ad tech employees by the end of the year — including nearly 1,000 employees this week

The job cuts will affect nearly half of Yahoo’s ad tech employees by the end of the year — including nearly 1,000 employees this week

Yahoo was bought out by private equity firm Apollo Global Management for $5billion in 2021, along with its one-time rival AOL.

Combined, Axios reports, the two companies made over 30 ad tech acquisitions going back more than a decade by the time Verizon acquired the two firms in 2015 and 2017, respectively.

Verizon had hoped to leverage the two companies massive data sets and their acquired ad tech businesses to create a unified digital advertising platform that could compete with Google or Meta (then Facebook).

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But that dream never materialized, Lanzone said, adding, ‘A lot of resources were going into that unified stack without a return.

‘This was a longstanding issue with every variation of this company… that needed to be solved eventually.’

Under Lanzone’s leadership the company will now shut down a part of its advertising business called SSP — or supply-side platform — which helps digital publishers sell automated ads on a variety of platforms.

It will also shut down its native advertising platform, called Gemini, and will instead leverage its newly-formed partnership with advertising giant Taboola to sell native advertising on its own platforms instead.

By doing so, Lanzone said, Yahoo will be able to increase the number of advertisers competing for ad placements on Yahoo properties by eight times.

At the same time, Yahoo will double-down on part of its ad business called DSP, or demand-side platform, which helps advertisers buy ads in an automated fashion across multiple websites.

The company will streamline that business to focus on selling advertisers to Fortune 500 businesses and premium accounts, Lanzone said.

To do so, Yahoo will build out a premium ad sales team for Yahoo’s owned and operated properties like Yahoo Sports, Yahoo News, Yahoo Mail and Yahoo Finance.

The new venture will be called Yahoo Advertising.

‘The moves are meant to simplify and strengthen the good parts of the business, while sunsetting the rest,’ Lanzone said.

Using the median salaries reported from those companies in regulatory filings, most of which are from 2021, DailyMail.com estimates that the combined annual salaries of the cut jobs is roughly $11.95 billion

Using the median salaries reported from those companies in regulatory filings, most of which are from 2021, DailyMail.com estimates that the combined annual salaries of the cut jobs is roughly $11.95 billion

Recent tech layoffs have hit highly-paid skilled workers the hardest, as companies that soared during the pandemic had to slash costs to brace for an economic slowdown. 

Tech-driven firms cut more than 150,000 workers last year, according to a recently released analysis from Layoffs.fyi, which tracks firings in real time through information gleaned in media and company releases. 

At just seven large tech firms, the job cuts announced in recent months totaled nearly 70,000: Amazon, Alphabet, Meta, Microsoft, Salesforce, HP and Twitter.

Using the median salaries reported from those companies in regulatory filings, most of which are from 2021, DailyMail.com estimates that the combined annual salaries of the cut jobs is roughly $11.95 billion.

That figure does not account for the fact that Amazon, which has a large logistics workforce and a median salary of just $29,007, has primarily targeted higher-paying corporate roles in its total announced cuts of 18,000 workers.

It also does not include the many thousands of jobs that have been cut at smaller tech companies that are not household names. 

However, for laid off tech workers, the news isn’t all bad, as data show that most of them are landing new jobs relatively quickly after losing their jobs.  

Nearly 40 percent previously laid off tech workers found jobs less than a month after they began searching, ZipRecruiter found in a recent survey. 

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‘Despite the widespread layoffs, hiring freezes, and cost-cutting taking place in tech, many tech workers are finding reemployment remarkably quickly,’ Julia Pollak, chief economist at ZipRecruiter, told the Wall Street Journal

‘They’re still the most sought-after workers with the most in-demand skills,’ she argued.

At the same time, blue collar workers are also in hot demand, and have seen their wages rise at a faster pace those of top earners.

In November, wages for the bottom quarter of earners were up 7.4 percent from a year ago, outpacing inflation, while wages for the top quarter rose just 4.8 percent.

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