U.S. telco expects acquisition to generate $1 billion in opex synergies by 2020.
Verizon late last week revealed it will record a $500 million charge on its $4.48 billion acquisition of Yahoo.
In an SEC filing on Thursday, the U.S. telco said the pre-tax charge will be recorded in the second quarter, and stems from "severance, acquisition and integration related expenses."
The disclosure seems to confirm earlier reports that Verizon is planning redundancies. It is expected to axe overlapping roles across Yahoo and AOL – which it acquired in 2015 for $4.4 billion. Between 1,000 and 2,100 layoffs are expected.
The acquisition of Yahoo and its combination with AOL to form a new company, called Oath, is expected to generate operating expense synergies of more than $1 billion through to 2020, Verizon said.
Verizon finally completed its acquisition of Yahoo’s core Web assets last Tuesday. Having originally agreed the transaction in July 2016, its progression was delayed by revelations about significant cyberattacks suffered by Yahoo before the deal was struck.
It led to a compromise under which Verizon and Yahoo agreed to share the legal and regulatory fallout from the hacks, and the price tag for Yahoo would be lowered to $4.48 billion instead of the original $4.83 billion.
The completion of the deal last week brought about the departure of Yahoo CEO Marissa Mayer. Newly-formed Oath will be led by former AOL chief Tim Armstrong.
The bits of Yahoo that Verizon did not buy will function as an investment company called Altaba.