The contraction continues in Verizon’s media operations. The telecom giant informed employees that it planned to cut about 800 jobs, or 7% of the workforce, in the media and advertising unit formerly branded Oath.
The division, which houses such Web 1.0 names as AOL, Yahoo and HuffPost, once had grand ambitions of keeping pace with digital giants. Last December, the company conceded the strategy of buying up distressed digital properties had not borne fruit, taking a $4.6 billion charge against the value of the former Oath unit.
Guru Gowrappan, who took the helm of the company’s media efforts last year along with CEO Hans Vestberg, told employees that the new priorities will be mobile and digital video products. The new cuts go along with a voluntary separation program that will see more than 10,000 workers exit by June.
In an email to employees, Gowrappan called the layoffs “difficult decisions,” but he said the reductions are not going to impede future growth. “I want to be clear that we will continue to scale, launch new products and innovate. We are an important part of Verizon,” he wrote, referring to the media operation.
Verizon has been changing course after a long stretch following an AT&T-like path into media, to the point of holding merger talks with traditional media companies. One signature venture from that era, the loss-making streaming service Go90, has already been scrapped, though the company still operates its FiOS pay-TV service.
Executives’ view of the media sector was made abundantly clear when Verizon reported its third-quarter results. The company at the time said it expected “relatively flat” Oath revenue in the near term and did not expect to hit $10 billion in revenue in the segment by 2020, undershooting a previous internal forecast.