AOL's Patch Fires Half its Staff

AOL is eliminating about 500 jobs at its struggling Patch local-news business, or close to half of the division’s more than 1,000 employees, according to a person with knowledge of the decision.

Chief Executive Officer Tim Armstrong held a meeting Friday morning with Patch staffers to announce the job cuts, said the person, who asked not to be identified because the matter is confidential. About 350 people will lose their jobs today and roughly 150 will be asked to stay for another 60 days as the company looks to find partners for some of the 900 Patch sites.

Armstrong, who has said he aims to make Patch profitable by the end of the year, told staffers last week the company may close down or find partners for 400 Patch websites. Today, Armstrong is telling employees the company may close as many as 20 percent of the Patch sites and find partners or consolidate another 20 percent, the person said.

Patch, which covers school-board meetings, local businesses and other neighborhood stories, has been a costly part of AOL’s strategy to transform the dial-up provider into an advertising- driven content publisher. The company has spent more than $300 million developing the sites, which serve communities and neighborhoods across the country.

While the division more than doubled its sales last year to just under $35 million, Patch’s annual costs range from $126 million to $162 million.