Yahoo is laying off some of its most senior Australian executives as the once-dominant internet company changes its business model yet again and the economic downturn curbs online advertising.
Sources close to the company, who spoke on condition of anonymity because they were not authorised to discuss the matter publicly, said Paul Sigaloff, Yahoo Asia Pacific regional boss and a well-liked company veteran, was among those set to depart after a transition period.
Yahoo was once a Google rival but was bought out by a US phone company before being sold to private equity at a loss.Credit:Bloomberg
The Australian cuts are part of a global wave of job losses that the company expects to eventually total about 1600 positions, or 20 per cent of its workforce, following similar announcements last month from Google, Microsoft and Amazon.
Unlike in the US, where the law permits workers to be made redundant almost instantly, Australia requires consultation and notice to affected employees that is ongoing at Yahoo.
A Yahoo Australia spokesman declined to answer questions about how many roles or positions were being eliminated, instead providing a general statement.
The statement conceded that Yahoo’s online advertising technology strategy, which tried to create a platform that could compete with digital giants such as Google and Facebook, had not worked. “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,” the spokesman said.
Yahoo will instead narrow its focus on one part of the advertising business to be called Yahoo Advertising, the spokesman said, resulting in half of the workers on its former broader ad business losing their jobs by the end of the year.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” the spokesman said.
Sigaloff referred a request for comment back to Yahoo’s spokesman.
Yahoo was once best known for its search engine but has outsourced the technology behind it since 2009.
US telecommunications firm Verizon bought Yahoo in 2016 for $US4.8 billion ($6.9 billion) after purchasing another internet giant of yesteryear, AOL, in 2015 for $US4.4 billion, in a move the phone company hoped could make it an advertising giant. But Verizon sold a 90 per cent interest in both to private equity firm Apollo Global Management in 2021 for a combined $US5 billion.
Many of Yahoo’s Australian staff are in its media business, which include news, finance and sport pages that produce a large volume of free content. The editorial side of those divisions was not affected by the recent cuts, which were announced internally last week.
Last week, the global media giant News Corp, which publishes The Daily Telegraph, Herald Sun and Australian, told the market that its earnings had fallen between 20 per cent and 30 per cent across its business and it would cut its workforce by 5 per cent, or about 1250 jobs.
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