Yahoo will lay off more than 20% of its workforce by the end of 2023, eliminating 1,000 positions as part of a major restructuring of its ad tech unit, the company said in a statement Thursday.

Yahoo, which private equity firm Apollo Global Management owns, added that the move would enable the company to narrow its focus and investment on its flagship ad business called DSP, or demand-side platform.

Yahoo for Business, the company's legacy ad tech division, will be overhauled and transformed into a new division called Yahoo Advertising, according to CNN. The changes will end Yahoo's years-long effort to compete directly with Google and Meta for digital advertising dominance.

"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," a Yahoo spokesperson told CNBC.

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.

Yahoo said the company would shift efforts to its 30-year partnership with Taboola, a digital advertising company, to satisfy ad services. By moving to Taboola, Yahoo will be able to increase the number of advertisers competing for ad placements on Yahoo properties by 8x, Lanzone told Axios.

Axios reported in November that Yahoo brings in about $8 billion in annual revenue.

Yahoo is the latest tech company to announce layoffs, joining companies like Zoom, Dell, and Microsoft. Disney also announced Wednesday it would cut about 7,000 jobs from its workforce.

Yahoo has struggled to find its footing since its heyday in the 1990s, compounded by the domination Google has over web searches and social media platforms like Facebook, Instagram, and YouTube replacing it as leading online destinations.

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