Back in November we talked about AOL’s need to trim their headcount by some 2,500 people. At the time the hope was that enough would walk away from their positions to avert the need for playing the bad guy and actually firing anyone. Well, according to All Things Digital the numbers didn’t quite add up with that plan and now AOL needs to start the proactive force reduction. Call it what you will. Here is some information from the ATD article
In November, AOL CEO Tim Armstrong said he needed 2,500 “volunteers” to give up their jobs, but not enough of them got the message — only 1,100 walked away on their own.
Now Armstrong is entering the second phase of his corporate slimdown, and is firing some 1,000+ employees.
AOL officials say the company has begun notifying European employees of its plans to shut down many of its offices there, and has started tapping some American workers as well. The bulk of the US layoffs are slated for this Wednesday, the company says.
This is a very sad story indeed. While we keep hearing forced words of hope and encouragement that “things have turned around” we get crap unemployment numbers in December and news like this from one of the industries that is supposedly “doing well”. Let’s be honest, you need to simply count your blessings if you are in a pocket of performance no matter what industry you call home and the online space is no different.
To underline just how different this world is the following was noted in the article written by Peter Kafka.
The company hasn’t released a breakdown of cuts by territory or by department. But I’m told that the company’s editorial/content production staff, which Armstrong and his lieutenants have been emphasizing as a priority in recent months, will not remain untouched.
This just means that the outsourcing of content production is likely the way that AOL will go more and more. Pure speculation on my part but if your strategy moving forward is creating more and more content then taking away part of that internal team just means it’s likely cheaper to outsource.
The full release can be found at ATD but the closing remarks are as follows.
We will be offering packages to impacted employees in the U.S. that will include severance, benefits and outplacement assistance, among other things.
All of our cost alignment work is about ensuring AOL’s sustainability and future success. Project Everest is the completion of phase one of AOL’s turnaround.
Interesting how they name something like this as if it were a military undertaking and the curious use of a mountain’s name that few have conquered and many more have failed to climb.
Google and AOL first sealed a search deal in May of 2002, so such a lengthy arrangement wouldn’t be too odd. The difference is that the original deal wasn’t scheduled to last through the end of 2010. Armstrong may be pushing for slightly better terms before he settles in with Google for the long haul, then, which would make sense.