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Verizon to Cut More Than 2,000 Jobs at AOL-Yahoo After Yahoo Deal Closes

Variety logo Variety 6/8/2017 Todd Spangler
© Provided by Variety

Verizon plans to lay off 15% of the combined workforce of AOL and Yahoo, once the $4.5 billion deal for Yahoo’s web assets closes, Variety has confirmed.

Given that AOL-Yahoo together have about 14,000 employees, around 2,100 jobs are set to be eliminated. The 15% layoff figure was first reported by TechCrunch, which is owned by AOL; an earlier Recode report pegged the number of layoffs at up to 1,000.

The integrated AOL-Yahoo business, housed under the newly created Oath division, will be organized around key content-based pillars: news, sports, finance, entertainment, and lifestyle. It will be led by current AOL CEO Tim Armstrong; Yahoo CEO Marissa Mayer will not be part of the Oath management team.

Asked to comment on the planned layoffs, an AOL rep responded with the following statement: “Oath’s strategy is to lead the global brand space. With access to over 1B consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy.”

Speaking at an investor conference last month, Verizon CEO Lowell McAdam said the telco expects the Yahoo acquisition to close in mid-June.

The layoffs at AOL and Yahoo units will not be uniform, with some departments facing staff cutbacks of up to 30% while at least one is set to eliminate less than 5% of its headcount, TechCrunch reported, citing an anonymous source.

Verizon’s deal for Yahoo originally was valued at about $4.83 billion when the companies inked the pact in July 2016, but the telco negotiated a $350 million discount in the wake of Yahoo’s two massive data breaches — the biggest ever reported — last fall.

At the investor conference, McAdam said Verizon has shied away from engaging in “transformational” mergers and acquisitions, because “you end up with AOL Time Warner, things that are difficult to manage.”

Once the Verizon deal closes, Yahoo will rename itself “Altaba Inc.” and Mayer plans to resign from the board along with six other current Yahoo board members. The new Altaba will be an investment-holding company whose major asset will be shares of China’s Alibaba Group.

Last November, AOL said it was cutting 500 jobs, or more than 5% of its global workforce, but said the layoffs were independent of the pending Yahoo deal.

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