Axe Falls at AOL: Almost One-Fifth of Staff to Be Laid Off

Layoffs are starting at AOL today, the latest step in the company effort’s to reposition itself as a premium content company. When all is said and done, AOL will shed about one-fifth of its 5,000 person staff. The move comes three days after the company’s $315 million acquisition of The Huffington Post closed and Arianna Huffington became head of its Huffington Post Media Group.
The cuts in the U.S. affect about 200 employees, mostly in AOL’s New York headquarters and in Dulles, Virginia. The jobs lost run the gamut from editorial to support to technology. At the same time as it’s making these cuts, though, AOL has made some high-profile hires recently. “This is going to be an editorial-driven organization as opposed to a freelance network,” an AOL spokesman said.
From a headcount standpoint, the bigger impact will be the loss of 700 AOL jobs in India, which traditionally played a back-office support role. Of the 700 people laid off, 300 will be outsourced to third parties.
AOL chairman and CEO Tim Armstrong sent out a memo to employees today titled “AOL’s Next Step” explaining the cuts. Among key points he made: the AOL brand name will survive in AOL Media and other areas; the Huffpo Media Group will be the engine journalism growth, under president and editor in chief Huffington and COO Jon Brod; the company will shift away from reliance on freelancers in favor of in-house editorial staff; and general managers will replace “Mayors,” a moniker that the company had been using for key editorial department positions.