Verizon Communications Inc. (NYSE:VZ) has been falling consistently to new lows. The stock recoverd 1.35% in the last trading session here is the reason why the stock is losing charm.
Verizon lays off 7% of the media group workers as the cost-cutting continues under the new chief executive, Hans Vestberg. The exact number of the cuts is not, but it would be around 800 positions at Verizon Media which previously (a brief period) was branded as the Oath.
The Cutting Continues
It’s merely a month when Verizon let the knife fall on more than 10,400 jobs companywide through its buyout program. It seems that the cutting is on as another 800 workers said to be cut by the media group.
The wireless company had sky-high hopes of creating an ad business which could rival the significant giants such as Alphabet Inc (NASDAQ:GOOGL) and Facebook, Inc. (NASDAQ:FB). It was that idea that led to the company spending almost $10 billion in buying up the former internet pioneers AOL and Yahoo.
However, the company has now realized that the integration of the two companies has brought fewer benefits than it was expected, and therefore, it slashed the value of its media unit almost by $5 billion in December last year.
New CEO Re-Shaping the Unit
The media unit’s new CEO, Guru Gowrappan, took the reins in October last year, and after a strategic review, he has made the changes, and the group would instead prioritize ‘Yahoo’s member-centric ecosystem’ along with the ad technology as well as video products.
Guru made it known to the employees about the layoffs in an email whereby he gives the priorities as focusing on mobile and streaming declines with desktop users. The goal is mainly to create the best experiences for the customers with the best platform. The cutting is probably a strategic step towards a better execution of the plan for future growth and innovation.
Verizon media isn’t stopping even with the cuttings, and probably it won’t give up. From the outside, a lot of questions are in place to be asked, but there’s not much to be done but only watch and wait. Perhaps, it might be a matter of time before we hear more as the new executives fish off their strategic views.