Verizon Communications Inc. expects to take a $500 million charge in the second quarter to cover severance and integration expenses related to the $4.5 billion acquisition of Yahoo! Inc.
One of the first businesses to get the boot is Yahoo Esports, a site dedicated to the covering growing sector of professional video gaming. Esports will start winding down Friday as Verizon decided to focus on the Yahoo Sports brand, Travis Gafford, who heads the Esports unit, sad in a note to readers and viewers.
Tim Armstrong, chief executive officer of Oath, Verizon’s internet media business, is in Sunnyvale, California, this week overseeing about 2,100 staff cuts as he starts integrating the Yahoo businesses. Verizon expects to see about $1 billion in operating cost savings through 2020 from the Yahoo deal, according to a filing Thursday.
The Yahoo purchase, which closed two days ago, will give New York-based Verizon access to hundreds of millions of internet users as it tries to build its digital assets. Verizon closed the deal for $4.48 billion, Marissa Mayer, chief executive of the internet company, has resigned. The mobile-phone company bought AOL two years ago also as part of its strategy to expand beyond the main wireless business.
Verizon shares closed little changed at $46.64 in New York Thursday. The stock is down 13 percent this year, while the Standard & Poor’s 500 Index rose 8.7 percent. Sean Hamel, a Yahoo spokesman, confirmed the shutdown of Esports, and declined to comment beyond Gafford’s letter.
With Tech Desk inputs