AOL said on Thursday it would slash 900 jobs worldwide, or almost 20 percent of its workforce, partly to eliminate overlap that stems from its recent purchase of The Huffington Post.
About 200 of the cuts are from AOL’s content and technology departments in the US. The remaining 700 are at AOL’s offices in India, which mainly provide back-office support to the US, but AOL spokesman Graham James said 300 of those would move to other companies, which are taking over support functions.
The cuts leave AOL with 3,500 employees in the US and about 500 overseas. The total workforce is one-fifth of what the company had at its peak in 2004, when its staff numbered more than 20,000.
The company pared thousands of workers in the years leading up to its separation from Time Warner Inc in late 2009. After the companies broke up, AOL cut about 2,300 of its then-6,900 employees — or about one-third of its workforce — through layoffs and buyouts.
AOL chief executive Tim Armstrong, speaking at a conference in New York, said the company has no immediate plans for further layoffs, but he added: “In our situation we don’t have the luxury of long-term planning.”
Armstrong said AOL will hire this year and will try to have more full-time journalists in its ranks to rely less on freelancers. He said about half the employees now have content-producing roles and he wants to increase that to 70 percent.
Armstrong maintained his confidence about AOL’s prospects for a comeback.
“AOL will turn around,” he said. “No doubt about that.”
However, AOL’s revenue is contributing less and less to the overall online advertising market in the US, eMarketer Inc analyst David Hallerman said.
“If they’re going to succeed, they’re going to be succeeding as a smaller company,” he said. “Therefore their success won’t be as big.”
Although Hallerman said he sees promise in the company’s efforts to establish itself as a local content provider, he said the ads that run on these sites bring in less revenue than those on its more popular Web sites.
That means AOL will have to make that up by drawing a lot of traffic.
Clayton Moran, an analyst with The Benchmark Co, said that the changes made since Armstrong took control are sensible and probably the best route the company could take.
However, he said the changes “haven’t shown a lot of financial progress. It’s taking time for the changes to have an impact.”
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