Yahoo has laid off 1,000 employees, or about 12% of its remaining employees, in a transfer aimed toward restructuring the corporate’s promoting expertise enterprise unit and reallocating its funds extra effectively.

The layoffs, enacted Thursday, mark the tip of Yahoo’s makes an attempt to be a direct competitor to Google and Meta within the digital promoting market, in line with a report from Axios, which was the primary outlet to publicize the job cuts.

An additional 600 workers can be let go within the second half of the 12 months, bringing the overall to about 20% of Yahoo’s whole employees. The layoffs signify a downsizing of roughly 50% of the corporate’s advert tech division, Axios reported.

Yahoo detailed the strategic reasoning behind the layoffs in a press release launched to TechCrunch, saying that the earlier advert tech plan, involving a unified stack of demand-side platform, supply-side platform and native companies, had merely not panned out.

“Regardless of a few years of effort and funding, this technique was not worthwhile and struggled to dwell as much as our excessive requirements throughout the whole stack,” the corporate mentioned.

Yahoo instructed Axios that it plans to close down its native promoting platform, Gemini, in favor of counting on a brand new partnership with advert tech big Taboola to promote over its personal content material, and that this may create a considerably bigger diploma of competitors for advert house on Yahoo content material.

This isn’t to say that Yahoo is planning to exit the promoting enterprise fully — the corporate is, as an entity, nonetheless worthwhile, with about $8 billion in income, and a few of that may be chalked as much as the demand-side a part of the advert tech unit. The DSP enterprise, which Axios mentioned can be renamed Yahoo Promoting, will truly rent extra employees, and the corporate might make acquisitions to assist develop that a part of the enterprise.

Yahoo representatives weren’t instantly accessible for remark.