We reported yesterday that
AOL’s hyper-local news service would lose hundreds of employees today, and now we have confirmation from a well-placed Patcher privy to the call that AOL CEO Tim Armstrong did indeed confirm to employees that hundreds would be laid off, with notifications of who will be let go coming throughout the coming week. (Disclosure: AOL owns TechCrunch).
In a call Armstrong held with the Patch team today, he explained that “AOL is going to be running the show” at the restructured Patch along with new CEO Bud Rosenthal. Rosenthal replaces outgoing CEO Steve Kalin, who was
reported to be getting the boot earlier this week.
400 Patch sites will be closed or partnered with outside sites over the coming week as part of the changes being made at Patch to try and turn things around, Armstrong explained on the call, but also reassured the Patch staff that the company is behind the initiative and told them not to “worry about what [they] read in the press,” calling it “bullshit.” Nonetheless, he encouraged any Patch non-believers still remaining at the company to get out now, emphasizing that there’s no room for equivocation in turning the effort around.
In a somewhat dramatic twist, Armstrong reportedly fired an employee who took his photo in front of the 1,000 people in attendance on the call, which our tipster characterized as “shameful and disgusting.”
Our source isn’t very convinced by the bluster around the new direction put forth by Armstrong. They suggest that this new strategy is really a “correction of a bad idea” that involved scaling far too fast without proper thought and planning, and notes that original Patch sites are still among the most successful. Focusing on those regions that actually do drive good revenue and traffic is probably the only way to save Patch at this point, however, so big cuts are probably unavoidable.
Armstrong put on a brave face and discussed tough choices on the call, but our source notes that the AOL CEO was also there throughout network’s decline, and had approved the very same people that he “buried on the call today.” Overall, the source says there’s not much reason to be confident in Patch’s leadership anymore.
The stakes at Patch are high because AOL has promised it will see positive revenue by the end of the year, which is a tall order given its most recent earnings results. These cuts and shifts in strategy are drastic measures, but that’s exactly what’s required if Armstrong wants to make good on a promise of Patch profitability by year’s end. Ultimately, our source says the lesson to learn is that “news works,” and that a strategy that refocuses on those editors who cover their towns well and leaving them intact is probably Patch’s best chance at still existing in some form a year from now.
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