The long-awaited acquisition deal of Yahoo by Verizon finally reached a conclusion on Thursday after Yahoo shareholders approved the sale of the business. That means on Tuesday, Yahoo will officially become Altaba, which will take the cash from the sale and Yahoo’s holdings in Yahoo Japan and Alibaba group.
Unfortunately, the closing of the deal isn’t going to be good news for everyone. TechCrunch reports that Verizon will cut around 15% of the staff from Yahoo and AOL after the merger closes, eliminating around 2,100 redundant jobs between the companies. The new combined entity, named Oath, will be headed by AOL CEO Tim Armstrong.
“Oath’s strategy is to lead the global brand space. With access to over 1 billion consumers upon close, we will be positioned to drive one of the most important platforms in the consumer brand space. Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy,” said an AOL spokesperson.
Verizon’s acquisition of Yahoo faced many bumps in the road on its way to finality. An initial deal was struck between the companies last July for $4.8 billion, but the waters were muddied after news broke that Yahoo had experienced two large-scale data breaches affecting over 1.5 billion user accounts.
Verizon executives immediately backed off from the deal, saying that they needed more information about the breaches before the deal could continue. Rumors even circulated for some time that the company was seeking a $1 billion discount on its purchase.
Pressure from shareholders mounted for both companies, and eventually Verizon settled for a price cut of around $350 million and a promise that Yahoo would share responsibility for any legal ramifications connected to the breaches.
After the vote on Thursday, the New York Times reports that Yahoo’s share price rose by $5.16, closing at $55.71. That’s at least some relief to the Yahoo employees who will lose their jobs in the transition, since it will increase the payouts they’ll earn on stock options.