AOL Axes Patch, Massive Staff Cuts

Dead set on profitability, AOL has dropped the axe on Patch.

About 350 editors in the local news unit can expect pink slips today, a source close to the situation tells Online Media Daily. Meanwhile, another 150 or so will be told to sit on their hands while AOL tries to find placement for them at other properties.

“Patch, as previously announced, is taking steps to move to profitability,” AOL said in an official statement on Friday. “Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions.”

AOL would not confirm the number of layoffs, or the number of editors likely to transition to other properties, on Friday.

Going forward, “Patch’s strategy will be to focus resources against core sites and partner in sites that need additional resources,” AOL said on Friday. “Additionally, there are sites that we will be consolidating or closing.”

On its quarterly earnings call earlier this month, AOL announced plans to significantly cut Patch’s national network.

Last week, Tim Armstrong told Patch employees to prepare for the worst. AOL’s head did so during a meeting (and conference call) with Patch editors, immediately following the dismissal of Patch CEO Steven Kalin and the naming of his replacement, AOL executive Bud Rosenthal.

On that call, Armstrong fired one editor on the spot for taking a picture of the proceedings. “Put that camera down … You’re fired,” Armstrong told the staffer.

Of Patch’s roughly 900 local news sites, AOL plans to continue supporting about 540 of them, a source told Online Media Daily.

Determined to bring Patch to profitability by the end of the year, Armstrong said earlier this month that the unit was being segmenting into three buckets: sites that are successes in terms of traffic and revenue generation; those shown to have the potential to be successful; and ones that lack either traffic or revenue traction. Regarding the latter two buckets, Armstrong said: “We have operations there that need improvement.”

Earlier this month, Armstrong -- who founded Patch in 2007 when he was still at Google -- said AOL had already decreased the cost structure of Patch by roughly 25%.

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4 comments about "AOL Axes Patch, Massive Staff Cuts".
  1. Mike Einstein from the Brothers Einstein , August 17, 2013 at 11:09 a.m.
    When are we going to realize that the legacy advertising-as-intermediary publishing model simply can't work online. Patch was a failed premise from the start.
  2. Stan Valinski from Multi-Media Solutions Group , August 17, 2013 at 6:14 p.m.
    Strongly disagree. What's been missing is intelligent & creative use of citizen's journalism.Mix aggregated news with user generated video of "breaking news" augmenting traditional local media. Start with the markets luxury brands already lavish with extra weight. Run it lean with title sponsorships. It's a great concept if the tech is used right.
  3. Al DiGuido from Optimus Publishing , August 19, 2013 at 9:25 a.m.
    Would love to hear more from Armstrong and the team on how they are going to "mend" Patch ? My sense is that the push strategy behind hyper local content and news is a great concept...Local advertisers need a way to connect with their digital consumers and prospects. Where AOL has failed is the design and construction of the messaging. My sense with the tablet rising as a content intersection...PATCH should have the look and feel, usability of a local digital newspaper..and allow advertisers to run "full page" digital/interactive ads within it's "Patch Pages". Let's hear more from the team on Patch on what will change to make the New Patch a place were readers and advertisers want to spend time.
  4. Bobby Campbell from Adkarma , August 20, 2013 at 11:54 a.m.
    Go heavy video and use adap to monetize and Adkarma...shameless plug but seriously