NEW YORK (CNBC) - Yahoo plans to cut about 20% of its workforce, or roughly 1,700 jobs, over the next year, as the technology industry continues to shed employees ahead of a potential economic slump later this year.
Of that number, the internet company will cut 1,000 jobs starting this week, Yahoo confirmed with CBS MoneyWatch.
Nearly half of the layoffs at Yahoo, which has been owned by private equity firm Apollo Global Management since 2021, will be in its unprofitable business ad tech unit. That business has not delivered as the company expected.
“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,” Yahoo said in a statement.
Yahoo believes the move will “simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” it said in the statement.
The job cuts come as some of the country’s largest tech companies slash jobs, including Google-parent Alphabet, Amazon, IBM, Lyft, Meta and Microsoft. Tech firms hired at a fast clip during the pandemic but are looking to shed costs as consumers pull back on spending.
In the past month alone, tech companies have cut more than 60,000 jobs, reversing a hiring spree that surged during the pandemic as millions of Americans moved their lives online. Undustry analysts expect further industry cuts in 2023 as the Federal Reserve continues to hike interest rates as it seeks to rein in inflation.