After Yahoo Deal is Finalized, Verizon Plans to Lay Off 2.1K Employees
Once Verizon completes its acquisition of Yahoo’s internet business on Tuesday, June 13, the company plans to let 2,100 employees go.
The ache for many of the Yahoo employees that lose their job will be eased by the value of their accumulated stock compensation, since the company’s share price increased 10 percent on Thursday, June 8.
According to a report in the New York Times, “The layoffs which were described by a person briefed on Verizon’s plans, represent about 15 percent of the work force at Yahoo and AOL, the Verizon unit with which it is to be combined. Yahoo, which had 8,600 full-time employees as of March 31, has already endured many rounds of cuts. During the five years that Marissa Mayer, the chief executive, has led the company, its work force dropped by 46 percent. AOL has also gone through repeated layoffs, most recently in November, when it cut 500 jobs.
Both companies declined to comment on the layoff plans. But the steady shrinking of Yahoo and AOL underscores the major challenges faced by both companies as they compete against the two behemoths of the internet, Google and Facebook, for advertising dollars.”
For over a decade, yahoo tried to figu e out a strategy for success. Now the internet giant has tossed in the towel. For a mere fraction of its top worth in 2000, Yahoo has sold its core business to Verizon.
The sale of the business and related arrangements for compensation was approve by Yahoo shareholders on Thursday, June 8. Once the deal closes on Tuesday, June 13, what is left of Yahoo will be renamed Altaba. The money from the sale along with Yahoo’s signific nt stock holdings will then be held in Alibaba Group and Yahoo Japan.
After the decision on Thursday, share prices for Yahoo increased $5.16, for a closing price of $55.71. This means that the terminated Yahoo employees will get bigger payouts.
The NYT reports, “Based on the increased stock price, Ms. Mayer will depart with $264 million for her five years of work at Yahoo, up from $239 million last Friday. Other senior Yahoo executives who are laid off will also get big severance packages, including up to two years of pay and accelerated vesting of all stock compensation. For example, Lisa Utzschneider, the chief revenue offic , will receive about $22 million, and Ken Goldman, the chief fin ncial offic , will get about $12 million, based on the current stock price and securities fili gs by the company. Lower-level Yahoo employees will also receive enhanced severance benefits that were established before the Verizon deal was struck last summer.”
Verizon plans to terminate 2,100 employees after its acquisition of Yahoo’s internet business is completed on Tuesday, June 13.