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Yahoo to lay off 20% of its workforce

A man walks past Oath Inc. Yahoo! signage displayed at the company's headquarters in Sunnyvale, California, U.S., on Tuesday, Aug. 28, 2018. Yahoo pitched a service to advertisers to mine data from more than 200 million Yahoo Mail inboxes. Photographer: David Paul Morris/Bloomberg via Getty Images

(CNN) — Yahoo said Thursday that it will cut 20% of its total workforce by the end of this year as it restructures its advertising unit, just the latest example of the layoffs spreading throughout the tech and media industries.

A Yahoo spokesperson told CNN that the company’s legacy ad tech division, Yahoo for Business, will be overhauled and transformed into a new division called Yahoo Advertising. As part of that change, Yahoo plans to cut nearly 50% of the division this year, “including nearly 1,000 employees this week,” the spokesperson said.

“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 spokesperson said in a statement.

Axios, which was first to report the news, said the job cuts will impact more than 1,600 people in total. Yahoo did not immediately respond to a request for comment on the matter.

Yahoo CEO Jim Lanzone told Axios in an interview that these changes will be “tremendously beneficial for the profitability of Yahoo overall,” and will allow the company “to go on offense” and invest more in other parts of its business that are profitable.

The announcement comes as a growing number of tech and media companies are cutting costs to adjust to a pullback in digital advertising spend amid broader uncertainty in the global economy.

Once synonymous with the internet itself for much of the 1990s, Yahoo struggled to find relevance in subsequent decades as Google dominated search and social media platforms like Facebook, Instagram and YouTube replaced it as leading online destinations.

Apollo Global Management, a private equity firm, acquired Yahoo in 2021 for $5 billion from Verizon, which had bought the company in 2017.