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Verizon takes $4.6B charge, offers buyouts to 10,000 workers

By Nicholas Sakelaris
Verizon took at $4.6 billion impairment charge on Yahoo/AOL. File Photo by Roger L. Wollenberg/UPI
Verizon took at $4.6 billion impairment charge on Yahoo/AOL. File Photo by Roger L. Wollenberg/UPI | License Photo

Dec. 11 (UPI) -- Strong competition from Google and Facebook has slashed Yahoo and AOL's value, forcing parent company Verizon to take a $4.6 billion impairment charge.

A regulatory statement filed Tuesday said the media segment for the company's Oath unit, which includes the merged Yahoo and AOL brands, generated lower than expected revenues.

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"These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business," Verizon said in the regulatory filing.

Verizon budgeted $4.8 billion for the Yahoo/AOL acquisition, which reflects the value of intangible assets. The non-cash impairment charge eliminates nearly all the money Verizon carried on its balance sheet for the acquisition.

Verizon announced Monday that 10,400 employees have accepted voluntary buyouts. Nearly half will take the buyout in December. Severance packages related to the buyout will range from $1.8 billion to $2.1 billion in the fourth quarter.

Former Oath CEO Tim Armstrong formed the division to compete against Google and Facebook, which dominate the digital ad space. Armstrong left in September. Verizon also reorganized its business groups, with Oath falling under Verizon Media Group.

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Verizon's newly appointed CEO Hans Vestberg wants the company to save $10 billion in cash by 2021.

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