Verizon Will Sustain Millions in Pre-Tax Costs From the Yahoo Deal
Verizon Communications said on Thursday it expected to incur about $500 million in pre-tax expenses in the second quarter as a result of its $4.48 billion purchase of Yahoo’s core business.
Verizon is combining Yahoo’s Internet assets with AOL, which it bought two years ago, to form a venture called Oath, led by AOL CEO Tim Armstrong. Oath’s more than 50 brands include HuffPost, TechCrunch, and Tumblr.
The expenses are related to severance payments, acquisition, and integration costs, Verizon, the No. 1 U.S. wireless operator, said in a regulatory filing.
Reuters reported last week that Verizon planned to cut about 2,000 jobs or 15% of the 14,000 employees at its Yahoo and AOL businesses.
Verizon also said it expected to save over $1 billion in operating costs through 2020 as a result of the Yahoo deal, which closed on Tuesday.
The closing of the deal, announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year.
On Friday, the remainder of Yahoo not acquired by Verizon will be renamed Altaba, a holding company whose main assets will be a 15.5% stake in Alibaba Group Holding and a 35.5% interest in Yahoo Japan.