Layoffs hit Verizon Media Group
Verizon is laying off 7 percent of its employees in its digital business as the phone company comes to grips with the hard realities of building a major media and advertising business to compete with Facebook and Google.
A spokesman for the company confirmed Wednesday that the company had laid off about 800 employees in its Verizon Media Business, formerly branded Oath. Verizon Media had a total of about 11,400 employees at the end of 2018.
‘These were difficult decisions, and we will ensure that our colleagues are treated with respect and fairness, and given the support they need,’ Guru Gowrappan, Verizon Media’s CEO, said in a letter to employees. ‘I want to be clear that we will continue to scale, launch new products and innovate. We are an important part of Verizon.’
He continued, ‘Now is the time to go on the offensive, go deep on our big priorities and do everything we can to advance the business.’
The layoffs come at a time when Verizon is struggling to make its transition from a wireless and broadband company into a media brand to create an alternative to digital advertising juggernauts Google and Facebook.
In 2017 it merged AOL and Yahoo into its business, creating the media division dubbed Oath. But the company admitted late last year that the assets weren’t as valuable as it had thought. The company announced in December it was writing down a $4.6 billion goodwill impairment in the fourth quarter as a result of the acquisitions.
Meanwhile, rivals AT&T and Comcast, which have bet big on their own media transformations are seeing their strategies take shape. AT&T spent $85 billion buying media giant Time Warner and also acquired satellite TV provider DirecTV to help distribute content. The company is betting heavily on the move to streaming services, having offered two options — DirecTV Now and AT&T Watch — on top of the various streaming services tied directly to core properties like HBO. AT&T CEO Randall Stephenson said he plans to launch another one this year.
Comcast has also been building on its 2011 acquisition of NBC Universal. It also plans to introduce an NBCUniversal streaming service early next year.
Success in Verizon’s media business is important given competition in its core wireless business continues to be fierce. The company has had to fend off assaults from smaller wireless companies T-Mobile and Sprint, which have been picking customers away from the bigger players.
The Verizon Media Group includes media properties, advertising and technology. In addition to Yahoo and AOL, it also includes properties, such as HuffPost and Tumblr.
‘Our goal is to create the best experiences for our consumers and the best platforms for our customers,’ a Verizon spokesperson said in an email to CNET. ‘Today marks a strategic step toward better execution of our plans for growth and innovation into the future.’