Verizon to Lay Off 2,100 Employees After Finalizing Yahoo Deal
SAN FRANCISCO — Verizon plans to lay off 2,100 people once it completes its acquisition of Yahoo’s internet business on Tuesday.
The sting will be soothed a bit for some of the Yahoo employees who lose their jobs: A 10 percent surge in the company’s share price on Thursday enhanced the value of their accumulated stock compensation.
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.
On Thursday, Yahoo shareholders approved the sale of the business to Verizon and the related compensation arrangements. After the deal’s close on Tuesday, the remainder of Yahoo will be renamed Altaba and will hold the cash from the sale as well as Yahoo’s significant stock holdings in Alibaba Group and Yahoo Japan.
Yahoo’s share price rose by $5.16 after the vote on Thursday, to close at $55.71. That will raise the payouts to Yahoo employees who are terminated.
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 officer, will receive about $22 million, and Ken Goldman, the chief financial officer, will get about $12 million, based on the current stock price and securities filings by the company.
Lower-level Yahoo employees will also receive enhanced severance benefits that were established before the Verizon deal was struck last summer.
The layoff plans were first reported by the technology sites Recode and TechCrunch.