AOL's Patch unit to lay off up to 500 workforce
AOL would lay off half of the personnel of its local news sites unit, Patch. It would also shutter or consolidate approximately 150 of its 900 websites while searching for partners for the other sites.
Last Friday, 350 of Patch's workforce were dismissed. The layoffs would continue until 500 of the 1,000 workers of Patch were fired. Overall, the downsizing would amount to roughly 9% of the total 5,500 employees of AOL.
"Patch's strategy will be to focus resources against core sites and partner in sites that need additional resources." AOL said in a statement. During the midday trading, the owner of Huffington Post and TechCrunch's shares dropped by 31 US cents to USD35.14.
The earnings report of AOL did not specify the finances of Patch. However, Outsell Inc's media analyst Ken Doctor said patch was obviously "a financial drag on earnings." He estimated AOL's investment in Patch to be over USD100 million.