Verizon will take a $4.6 billion goodwill impairment charge as the company's media business fails to meet expectations, according to a regulatory statement filed Tuesday.
"Verizon's Media business, branded Oath, has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings," the filing reads. "These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business."
Verizon said the media segment is less valuable than previously thought, and has adjusted financial projections as a result.
The company's Oath unit — the result of a merger between Yahoo and AOL under the Verizon brand — has come under particular scrutiny as Verizon seeks to save $10 billion in cash by 2021. Newly appointed CEO Hans Vestberg has taken an aggressive review of business units and cost-saving measures.
Verizon announced Monday that 10,400 employees had accepted buyout offers and would leave the company by June 2019. That program will cost Verizon between $1.8 billion and $2.1 billion in severance charges during the fourth quarter of 2018, according to the filing.
Former Oath CEO Tim Armstrong formed the division as a way to combat Google's and Facebook's dominance in the digital ad market. Armstrong left the company in September, and in November Verizon reorganized its businesses into three segments: Verizon Business, Verizon Consumer and Verizon Media Group. Guru Gowrappan was named CEO of Verizon Media Group.
Shares of Verizon slipped just into the red during premarket trading Tuesday, amid an overall market rebound.
