Yahoo plans to slash 20 percent of its workforce, or around 1,700 employees, over the next year.

Many of those cuts will target the company’s business ad tech unit. “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,” Yahoo wrote in a statement. 

The past few years have been a hard struggle for Yahoo, once the darling of Silicon Valley. In 2012, former Google executive Marissa Mayer took the CEO role and promptly launched an acquisition spree, hoping to turn the company around. However, Yahoo’s fortunes didn’t improve significantly against rivals such as Google, and the company was eventually sold to Verizon in 2017 (and another investor four years after that). Despite those struggles, Yahoo still maintains an ecosystem of websites visited by millions of people every day.

According to levels.fyi, which crowdsources compensation information for various tech companies, software engineers at Yahoo still take home sizable paychecks; at the IC3 level, for example, average annual salary is $145,086, with stock options worth $14,542 and a bonus of $16,996. That’s competitive with engineer compensation at many other companies; despite its well-publicized struggles, Yahoo needs to pay those high salaries and benefits in order to attract and retain the tech professionals who keep its tech stack running.

Over the past few months, a number of tech giants have announced significant layoffs, including Google, Amazon, and Microsoft. Generalized fears of an economic recession have led businesses and consumers to cut back on spending for everything from cloud services to hardware, driving these tech companies to slice spending and headcount. Tech-focused startups have also initiated layoffs in an attempt to endure tightening macroeconomic conditions.

However, it’s also important to note that the overall tech unemployment rate fell to 1.5 percent in January, according to the latest CompTIA analysis of data from the U.S. Bureau of Labor Statistics (BLS). “Undoubtedly some companies over-hired and are now scaling back. The low tech unemployment rate and steady hiring activity by employers confirms the long-term demand for tech talent across many sectors of the economy,” Tim Herbert, chief research officer for CompTIA, wrote in a statement accompanying the data.