New York — Barely days after finalizing its deal with the Huffington Post, AOL Inc., on Thursday announced plans to terminate as many as 900 jobs globally as the company integrates the news website and restructures to try to return to revenue growth, according to a company memo sent by CEO Tim Armstrong, Bloomberg reported.
According to the source familiar with the matter quoted as saying that AOL is laying off around 200 employees in the United States, around 120 of whom are editorial staffers and another 700 in India, nearly 20 percent of its 5,000-strong global workforce. The remaining dismissal are expected to impact other areas of AOL’s media business, including its technology and product units.
“Our strategy remains clear: create high-quality content experiences for consumers, at scale,” AOL CEO Tim Armstrong explained in an internal memo. “Today, we are announcing an organizational restructuring that will significantly improve AOL’s ability to focus on growth.”
AOL, on Monday concluded its $315-million acquisition of the Huffington Post, an online news website that both aggregates news from other outlets and produces original content.
Moreover, about 300 of the 700 employees who will lose their jobs in India would move over to AOL’s outsourcing partners, including Hewlett-Packard and MindTree, and continue to do work for the company, the source added.
AOL officials were not available for comment on Thursday morning.
“The changes for me today are very personal,” said Armstrong at the Bloomberg Media Summit in New York. “AOL employees deserve an exceptional amount of credit because I do not think it is easy to go from managing decline to managing growth.”
“On the media section of the business I want to run a content-driven company,” Armstrong said. He said he would discuss the job cuts with employees later today.
The company at its peak, employed around 20,000 workers, and had about 5,860 employees at the end of last year, according to regulatory filings. If the company sheds 900 jobs, that would be 15 percent of the total.
In fact, the largest job cut in AOL’s history was, when the company fired some 2,000 employees in 2007, and showed about 700 staffers the door in 2009.
Â
With Huffington Post, AOL said it will in fact be securing 250 employees — around 150 of whom are editorial staffers. As a result, AOL said it will see a net gain of 17 editorial staffers.
AOL, whose sales have dropped for four straight quarters, agreed to buy the Huffington Post for $315 million, striving to increase online content to help boost advertising revenue. In India, the company is outsourcing back-office work to cut costs and focus on increasing consumer product sales.
“Moving forward, our focus in India will be on our core capabilities, around building the most compelling consumer-facing products primarily for the Indian and other Asian markets,” an AOL spokeswoman said in a statement. “We will be partnering with Mindtree and HP to round out our business operations.”
Arianna Huffington, co-founder of the Huffington Post, joined AOL as president and editor-in-chief of a newly formulated media group, which includes other AOL content. Her website will serve as the model for other journalism efforts, Armstrong said in the memo.
“AOL will invest more heavily in our in-house editorial team and shift away from a reliance on freelance journalists,” he said. “Journalists are the heart and soul of a media company.”
In September, AOL acquired TechCrunch, a leading Silicon Valley technology blog. Other AOL properties include Engadget, Patch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog and StyleList.
AOL has invested heavily in Patch, which provides local news in hundreds of communities across the United States, and a “citizen journalism” operation called Seed.
“AOL will certainly turn around,” he said. “I have no doubt about that.”
It was spun off by Time Warner in December into an independent company.