AOL Axes 200 U.S. Staffers, 400 In India

On the heels of its Huffington Post acquisition, AOL on Thursday announced plans to fire about 200 U.S. employees, around 120 of whom are editorial staffers. The remaining cuts 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 structure that will significantly improve AOL's ability to focus on growth."

The layoffs are clearly an effort to eliminate redundancies created by merging The Huffington Post with AOL's content properties. First announced in early February, AOL on Monday officially closed its $315 acquisition of HuffPo.

With Huffington Post, AOL said it will actually be gaining 250 employees -- around 150 of whom are editorial staffers. As a result, AOL said it will see a net gain of 17 editorial staffers.

In India, meanwhile, AOL will be letting go around 400 employees and transitioning around approximately 300 employees to become contractors.

"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 told Online Media Daily. "We'll be partnering with Mindtree and HP to round out our business operations."

Hardly the largest job cut in AOL's history, the company fired some 2,000 employees in 2007, and showed about 700 staffers the door in 2009.

At its peak, AOL employed some 20,000 workers. Today, that number is closer to 5,000, according to regulatory filings.

During the fourth quarter of 2010, AOL's total revenues fell 26%, while ad sales plummeted 29%. Display -- especially domestic sales -- was the strongest component of AOL's fourth-quarter ad pie, although its overall display revenues declined 14%, as international display sales dove 53%.

1 comment about "AOL Axes 200 U.S. Staffers, 400 In India".
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  1. Sam Hamadeh from PVC Media, March 11, 2011 at 2:28 p.m.

    AOL substantially overpaid for Huffington Post Inc. based on imagined spiking revenue growth for 2011 and 2012, that almost certainly won't come, and which is now plan now that we're almost into the 2nd quarter of the year. Do the math on the acquisition price (Huffington Post was a private company, but you can get the estimated private company financials from privco.com, the private company financial data site), Pasted the AOL-HuffingtonPost private co. acquisition details below, see for yourself. - H

    reference: http://www.privco.com/private-company/huffingtonpostcom-inc
    PRIVCO.com PRIVATE COMPANY DEAL OVERVIEW
    Date Announced: 02/2011
    Deal Amount $315,000,000 Target: HuffingtonPost.com, Inc.
    Buyer: AOL Inc.

    TARGET INDUSTRY:
    Target Sector -> Traget Industry -> Target Sub-Industry
    Internet -> Internet Content Providers -> Blogs & Blogging
    Internet -> Internet Content Providers -> News Sources
    TARGET FINANCIALS DEAL MULTIPLES
    Revenue 31000000 P/R 10.2 x
    Net Income(Loss) 2000000 P/E 157.5x

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