Verizon has confirmed its plans to cut down 2,100 employees who represent about 15% its workforce at AOL and Yahoo. It’s really sad news for some of the Yahoo employees who will be losing their jobs very soon. On the announcement of this news on 8th June, there was a 10.21 percent surge in the share price of Yahoo when it jumped from the previous close of $50.55 to $55.71. As of today, the total workforce across the combined units of Yahoo and AOL is approximately 14,000. Based on insider sources, Verizon proposes to cut down 15% of the combined workforce of Yahoo and AOL which will be forming the new Verizon Business Unit.
Yahoo has already gone through a rough time in recent years and there have been plenty of job cuts under the leadership of its ex-CEO, Marissa Mayer. As of March 31, Yahoo had a workforce of approximately 8,600 full-time employees. Marissa Mayer has announced a huge round of cuts during her 5 years of tenure as the Chief Execute of Yahoo and the workforce was reduced by 46% in this time span. AOL was also having an equally bad time and it announced 500 job cuts recently as part of its restructuring process in November 2016. During his interview with media, AOL CEO Tim Armstrong announced that the cuts were mostly in corporate units and the employees will be shifted to video, data and mobile offerings in future.
The combined AOL-Yahoo entity will be rebranded with a new name which is yet to be announced officially (Already news is circulating that it will be called Oath:). The combined entity will be headed by Time Armstrong, the current Chief Executive Officer of AOL. There is expected to be redundant roles in various departments like Finance, Marketing, HR and admin based on the sources. There are no voluntary redundancies offered but employees who left the company in recent months have been offered decent severance packages.
In February 2017, Yahoo knocked off $350 million from the previously agreed sale price reducing to $4.48 billion after it suffered massive data breaches which affected more than 1 billion Yahoo email accounts. The voting was conducted on June 8th and the Shareholders of Yahoo have officially approved the company’s sale to Verizon for a price of $4.48 billion and the deal is expected to be closed on June 13th, 2017. Following the merger, Marissa Mayer will step down as CEO and has been rewarded stocks worth of $186 million as part of her severance.
Following the closure of this deal, the remaining part of Yahoo will be rebranded as Altaba Inc., and get registered as an Investment company which will hold 15% stake in the e-commerce business of Alibaba and 35.5% stake in Yahoo Japan.