Verizon To Record Hefty $4.6 Bln Impairment Charge Due To Struggling Oath Unit

(RTTNews) - Verizon (VZ) Tuesday said it expects to record a hefty goodwill impairment charge of $4.6 billion as its media business Oath fails to meet expectations.

In an SEC filing, Verizon said, its "Media business, branded Oath, has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings. These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business."

Oath has also achieved lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses.

Verizon said the media segment is less valuable than previously thought, and has adjusted financial projections as a result. Oath segment is a result of a merger between Yahoo and AOL under the Verizon brand.

On Monday, Verizon also announced that about 10,400 employees, or nearly 7 percent of its workforce, have accepted the company's voluntary buyout offer that was first announced in September.

This voluntary buyout program is part of Verizon's efforts to cut costs and trim its workforce as it focuses on optimizing growth opportunities in 5G network service. Verizon has announced a goal to save $10 billion in cash by 2021.

The company said it expects record a severance charge in the range of $1.8 billion to $2.1 billion in the fourth quarter related to the voluntary buyout program.