- Recently-rebranded Verizon Media Group axes 800 staff
- Division's CEO insists it is an important part of the telco
- Layoffs follow $4.6 billion writedown on unit
You know the old saying, "you can't polish a turd, but you can roll it in glitter"? Well, when it comes to Verizon Media Group, it seems the US telco is running short of glitter.
The name 'Verizon Media Group' itself was the latest attempt at trying to add some fresh sparkle to the company's media and advertising operation. It replaced the somewhat tainted Oath brand earlier in January, after the division had a tumultuous 2018, replete with falling revenue and an executive exodus that was topped off by a $4.6 billion writedown in December.
Now less than a month into the new year, and Verizon Media Group CEO Guru Gowrappan has informed employees via an email published in full by CNBC that 7 percent of them are being laid off.
The redundancies were made after he carried out what he said was an "exhaustive review" of the Verizon Media Group's activities.
"These were difficult decisions, and we will ensure that our colleagues are treated with respect and fairness, and given the support they need," Gowrappan wrote.
He insisted though that Verizon Media Group is an important part of the telco. He plans to go on the offensive in the first quarter, focusing on growing its ecosystem with compelling mobile and video products, drumming up business for the B2B segment, and expanding its video supply and overall distribution through partnerships.
So in a nutshell, he plans to do what the company was supposed to be doing all along, but aggressively, and in the first quarter of this year.
As mentioned in a previous article, media and online advertising is a bit of a tough nut to crack, given its dominance by Google and Facebook. AT&T has plunged head first into the sector, snapping up DirecTV and Time Warner, and augmenting them with a new advertising unit, Xandr.
Verizon on the other hand bought AOL and Yahoo, two companies whose best days were decidedly behind them. They both owned a broad portfolio of well-known online properties, including Huffington Post and Tumblr, among others, but nothing close to the scale of Google and Facebook.
Then of course there was go90, a mobile-focused OTT video service that can best be described as a flop. Launched in 2015, it tried to win over young audiences by striking deals with, or buying outright, up and coming content producers. It attempted to combine this more experimental content with more traditional programming such as live sport.
Unfortunately, the audience didn't bite, sticking instead with platforms like YouTube. Go90, which had been operating as standalone business unit, was subsumed by Oath in early 2018, which months later shut it down and stripped it for parts.
With Oath now becoming Verizon Media Group, there is a sense that this could be the last throw of the dice for the telco when it comes to media and advertising.
That's because Verizon CEO Hans Vestberg wants his company to cut costs by $10 billion by 2021. With that in mind, Gowrappan might find he has a limited length of time to reverse Verizon Media Group's ailing fortunes.
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