AOL said it expects to eliminate 500 jobs, or about 5 percent of its staff, AOL CEO Tim Armstrong told Recode, saying most of the cuts will come in its corporate units, with resources then shifted to mobile, video and data offerings.
“The layoffs are related to a 2017 strategy where we will add to our business,” he said. “These are super-targeted by area, and we will be re-growing, especially in video and mobile.” Armstrong reiterated the plan in a memo sent to employees. In the letter, the CEO explained that restructuring was necessary, based on the company’s strategy and the changes it is seeing in the industry. The CEO said the company will be aligned to drive a talent and operations plan in line with profitability.
The cuts come after AOL added about 1,500 workers this year from an advertising deal with Microsoft and its purchase of Millennial Media, which prompted the consolidation to improve financial performance.
Armstrong said the layoffs are not related to current discussions AOL execs are having with Yahoo counterparts about integration between the two companies. Later, there will also be plans for Yahoo itself. Verizon said earlier this year that it would pay USD 4.6 billion for Yahoo, but the completion of the acquisition remains mired in issues related to a breach that impacted 500 million customer accounts.
