- Getty/Kimberly White
Expect massive layoffs at Yahoo if Verizon ends up buying its core business, says one of the leading Yahoo analysts.
According to a note published by SunTrust analyst Robert Peck on Friday, Yahoo should expect a roughly 40% workforce reduction if a big company like Verizon takes over Yahoo’s internet business.
Peck argues that the layoffs would be aimed at clearing all the overlapping positions that would be created in the combined entity, especially around sales and general operation jobs. Peck assumes a 40% job reduction would save Verizon almost $2 billion.
Verizon has publicly expressed interest in acquiring Yahoo and is often mentioned as the leading candidate to buy Yahoo’s core internet business.
Peck adds that even if the acquirer was not as big as Verizon, it would still cut roughly 1,000 positions at Yahoo post-acquisition, which would reduce almost $750 million in costs. Yahoo currently has a little over 10,000 full-time employees.
Under Peck’s assumptions, Yahoo’s core internet business could be worth as much as $8 billion, the note said.
The note comes on the heels of a Bloomberg report Thursday that said Verizon is expected to place a bid for Yahoo’s core business next week. Other companies reportedly still considering making a bid include Google, Time, and private equity firms like TPG and Bain.
Yahoo recently put its core internet business, which includes its search and online ad technology, up for sale, following pressure from activist investors to make “significant changes” to the company. According to a Re/code report, Yahoo extended the deadline to place bids another week to April 18.