Verizon to Take $500 Million Charge for Yahoo Acquisition, Including Layoff-Related Costs

Lowell McAdam
Photo by Mark Lennihan/AP/REX/Shutterstock (6079375c)

Telco projects over $1 billion in cost savings from deal by 2020

Verizon Communications will take a $500 million pretax charge related to its acquisition of Yahoo’s operating businesses, a deal that closed Tuesday.

The charge for severance, integration and other acquisition-related costs will be recorded in the second quarter of 2017, Verizon disclosed in an SEC filing Thursday. The company is slashing 15% of the workforce of the combined AOL-Yahoo division, representing the elimination of about 2,100 jobs. The merged group has been renamed Oath and is led by ex-AOL CEO Tim Armstrong.

Related

Marissa Mayer Yahoo TV Production failure

Verizon Closes $4.5 Billion Yahoo Deal, Marissa Mayer Resigns

In the filing, Verizon also said expects to achieve over $1 billion in cumulative cost savings on operating expenses through 2020 because of synergies from the deal.

Verizon CEO Lowell McAdam (pictured above), speaking at an investor conference last month, said the Yahoo acquisition didn’t represent a “transformational” mergers and acquisition. The telco has shied away from those, he said, because “you end up with AOL Time Warner, things that are difficult to manage.”

With the closing of Verizon’s deal for the Yahoo internet businesses, former Yahoo chief Marissa Mayer resigned from the company after five years in the role.

Armstrong has touted the bigger scale of Oath, pooling more than 50 media and tech brands from AOL and Yahoo to reach more than 1 billion users worldwide. The company’s theory is that under one roof, AOL and Yahoo — once among the biggest and most powerful internet companies in the world — will more efficiently reach large audiences.

Oath also will serve as the launch pad for Verizon to test out an over-the-top TV service, McAdam said last month.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 2

Leave a Reply

2 Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  1. Dunstan says:

    No one cares about the crap “programming” of either Yahoo or AOL; they’re both unwieldy dinosaurs that failed to keep up with changing tech.

    Separately, I’m amazed that our deranged pseudo-president has done nothing to “negotiate” new jobs for all those laid-off Verizon employees. Go figure.

    • Mike Connor says:

      What the flying fig does Trump have to do with something that was happening well before he was Prez? Dunstan. stop being such a Trump Derangement Syndrome suffering lib. You just look stupid.

More Digital News from Variety

Loading