Big Staff Reductions Are on the Way for the Two Companies
As the Yahoo-AOL merger nears its completion, multiple reports are coming in, claiming that 15% of the total workforce, which accounts for 2,100 jobs, will be trimmed in order to reduce redundancies between the two companies.
The ailing Yahoo! Inc. (NASDAQ:YHOO) had been looking to be acquired for much of last year. The former tech giant had been unable to return to relevancy as it saw its market share shrink over the years. The deal was even re-negotiated after the massive Yahoo data breach that saw over one billion accounts hacked.
With the deal nearing its completion, however, we’re hearing more about what the specifics of the new company, called Oath, will look like.
While job reductions are not uncommon during mergers, the 2,100 jobs lost from both Yahoo and AOL, Inc. (NYSE:AOL) will affect employees in a wide variety of roles across the two organizations. It’s more likely that organizational staff, media and marketing, and human resources will see the biggest cuts.
The 2,100 employees leaving the telecom and tech companies will now find themselves in the position that thousands of retails workers and manufacturing laborers have been in for the past year, with large bankruptcies affecting the retail sector in particular as e-commerce eats away at the brick-and-mortar stores’ market share.
This number, while confirmed by multiple news outlets, is also not necessarily final. The company may look to do further cuts down the road as the organizations learn how to work with one another.
The deal was made possible by Yahoo’s inability to reclaim its former glory. The tech company has toiled away for years now, overshadowed by larger and more powerful companies in Silicon Valley. As time went on, it became apparent that the company would have to be acquired if it wished to stay afloat.
The job cuts represent a departure from the story we’re hearing across the U.S., as Silicon Valley and companies in the Bay Area have been some of the bigger hiring forces at work in the labor market and have been seen as the models of success.
“Confirmed: Verizon will cut ~15% of AOL-Yahoo staff after merger closes,” TechCrunch, June 8, 2017.