Yahoo will eliminate about 1,000 jobs beginning this week, or roughly 12 per cent of its employees, the first round of cuts in a larger plan to restructure its advertising technology division amid a wave of layoffs in the industry.
The company, owned by Apollo Global Management, plans to reduce headcount at its Yahoo for Business advertising technology unit by about 50 per cent by the end of 2023, or more than 20 per cent of the workforce at Yahoo, a company representative said.
“These changes announced today are entirely within the context of creating a better business plan for that division going forward,” chief executive Jim Lanzone said on Thursday in an interview.
“The company has taken many bites of the apple here in trying to make it work over the years, but as a stand-alone company, we had to take a very honest view in how we apply our resources.”
Digital advertising providers have had to grapple with skittish customers who are concerned about the uncertain economic climate.
Yahoo’s restructuring will create a new division called Yahoo Advertising, which will focus advertising sales teams on the company’s properties, including Yahoo Finance, Yahoo News and Yahoo Sports.
Tens of thousands of jobs have been cut in the technology sector in recent months amid rising interest rates and growing fears of a recession in the world's largest economy.
Companies such as Meta, Amazon, Microsoft and Google's parent Alphabet have axed staff after boosting hiring at the height of the Covid-19 pandemic.
Spotify, Twitter, IBM, Disney, PayPal and Dell are other major companies to have cut jobs in recent weeks.
While overall, companies in the US let go of 363,824 jobs in 2022, 13 per cent more than 2021, the technology sector was the leading job-cutting industry last year, according Chicago-based global employment company Challenger, Gray & Christmas.
A total of 97,171 jobs were cut in the technology sector last year, a 649 per cent increase from firings in the industry in 2021 — the highest since the “dot-com” crash that started in 2000, according to a survey by the company.
Yahoo is “very profitable,” Mr Lanzone said, adding that the job cuts were due more to the division’s restructuring than troubles in the advertising market.
“We would’ve made these changes even at the peak of the market,” he said.
Yahoo is “still hiring aggressively,” Mr Lanzone said, and employees who lose their jobs will be considered for other roles at the company.
Axios had reported the job cuts earlier.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
RESULTS
1.45pm: Maiden Dh75,000 1,400m
Winner: Dirilis Ertugrul, Fabrice Veron (jockey), Ismail Mohammed (trainer)
2.15pm: Handicap Dh90,000 1,400m
Winner: Kidd Malibu, Sandro Paiva, Musabah Al Muhairi
2.45pm: Maiden Dh75,000 1,000m
Winner: Raakezz, Tadhg O’Shea, Nicholas Bachalard
3.15pm: Handicap Dh105,000 1,200m
Winner: Au Couer, Sean Kirrane, Satish Seemar
3.45pm: Maiden Dh75,000 1,600m
Winner: Rayig, Pat Dobbs, Doug Watson
4.15pm: Handicap Dh105,000 1,600m
Winner: Chiefdom, Royston Ffrench, Salem bin Ghadayer
4.45pm: Handicap Dh80,000 1,800m
Winner: King’s Shadow, Richard Mullen, Satish Seemar
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
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- 600-seat auditorium
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- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
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- Disruption Lab and Research Centre for developing entrepreneurial skills
