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Coming as a shock to pretty much no one, AOL chief exec Tim Armstrong confirmed today that the company’s local news gathering arm Patch will see heavy layoffs and some community sites closing down in the coming weeks, reports news publishing insider Jim Romenesko.
Patch has long been something Armstrong swore was part of AOL’s long-term strategy for growing the business through local advertising sales. Right now, Patch has hundreds of sites that are run by a skeleton crew of editors and reporters that cover news specific to their local area — essentially filling in for old print newspapers that have either shut down or cut back to publishing once a week. However, it never lived up to its full potential, costing the company lots of money and failing to achieve profitability.
Over the last year investors have been wondering why Armstrong was continuing to pour money into Patch, which was noticeably absent from AOL’s Q2 2013 earnings report earlier this week. And now we might know why: Patch is no longer a big priority for AOL.
AOL is reportedly ready to lay off hundreds of Patch positions and close over 300 of its local sites as part of a restructuring effort under Armstrong and new Patch CEO Bud Rosenthal, according to Romenesko’s sources.
Among the casualties so far is Patch creative director Abel Lenz who was apparently fired on the spot for taking pictures of Armstrong during his live conference call with Patch staffers, according to multiple reports. And while Armstrong said no layoffs would be happening in the immediate future, making a grandstanding display of power like that certainly doesn’t help boost morale.