AOL to Lay Off 500 Employees
Verizon Communications Inc's AOL digital media company will lay off 5 percent of its workforce, or about 500 employees, to consolidate operations after recent acquisitions, a person familiar with the situation said on Thursday.
Most of the cuts will be in corporate units, including human resources, finance, marketing and communications, while resources will be shifted more to AOL's mobile, video and data offerings, the source said.
Chief Executive Officer Tim Armstrong informed employees about the workforce cuts in an email on Thursday morning.
"Due to the deals we have done over the past 12 months, we have added over 1,500 new people to the company," Armstrong said in the email, which Reuters saw. "As we have settled into those changes, there are a number of areas that require consolidation to improve operations and limit the amount of hand-offs in our business processes."
Verizon bought AOL for $4.4 billion in July last year, betting that a push into mobile video and targeted advertising could help it tap revenue outside the saturated wireless market.
Following that, AOL took over much of Microsoft Corp's advertising technology business and bought Millennial Media for about $250 million.
The cuts do not stem from Verizon's impending plans to buy Yahoo Inc's core internet properties for $4.83 billion. Verizon, the No. 1 U.S. wireless provider, said in July it would buy Yahoo to combine its websites, search, email and messenger assets as well as advertising technology tools with AOL.
Technology news site Recode first reported news of the job cuts in an interview with Armstrong. (http://on.recode.net/2g1Bpsv)
(Reporting by Malathi Nayak in Washington and Rishika Sadam in Bengaluru; Editing by Lisa Von Ahn)