The AOL and The Huffington Post merger has been widely discussed in the media. Now AOL has finally acquired Arianna Huffington's company for a $315 million price tag, it has been forced to make changes. One big change announced yesterday? AOL will be letting go of 20 percent of its workforce, reported The Wall Street Journal.
The company is trying to weed out redundancies with The Huffington Post's staff. To that end, 900 jobs have been cut: 200 are U.S. editorial staff; the other 700 jobs were India-based. Of those 700, 300 have been outsourced to AOL's third-party contractors. Before the cut, AOL employed 5,000 people. Last year, the company cut 2,300 people. At its peak, it employed 20,000 people, reported BBC News.
Sites Gadling, DailyFinance and Stylelist were among those hit the hardest with layoffs, according to Mashable. The News and Finance unit (which includes DailyFinance) was one of the main targets due to its significant losses of a reported $20 million, reported Yahoo! Finance. Some of the staff who received pink slips were well known in the industry, including PoliticsDaily's editor-in-chief Melinda Henneberger.
AOL CEO Tim Armstrong discussed his company's decision at the Bloomberg Media Summit, reported paidContent.org. He pointed out the company's hiring of 1,300 journalists in the last year, adding his intent to add more this year. He also hope to have more content hires as AOL attempts to move from freelance model to a full-time model. The cuts did have a positive effect on AOL's stock, which had lost 30% of its value in the past four months before yesterday's announcement, according to Wired.com.
AOL has made several acquisitions over the past year. In addition to the Huffington Post, the company also acquired Patch- which has hired 1,200 people outside of AOL's current figure of 5,000- and Outside.in. Yahoo! Finance asked Armstrong if he had any intentions to gain any more acquisitions. Although he didn't directly respond to the question, he said, "We'll have more announcements next week in terms of the brands and our priorities. We'll also announce some more hiring next week in the content area. That's something to be on the look out for."
As for the decision to let go such a large percentage of the company's workforce, Armstrong said, "I do want to make the point that companies do come down to the people in it. We tried to make changes that came down today thoughtfully. The company's not going to be successful unless the people in it are successful and we understand that."