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AOL Announces 150 People Layoff – Can the Company Recover?

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AOL Announces 150 People Layoff – Can the Company Recover?

Columbus Circle - AOL

AOL Tower, Columbus Circle

AOL, Inc. (NYSE: AOL), owner of TechCrunch, has announced that the company is set to layoff “around” 150 people. Consolidation within the company is also being seen. Joystiq and TUAW, two major outlets owned by AOL, are being consolidated into their Engadget website. Further consolidation of AOL Autos is set to take place with the site being merged into Autoblog.

The company is cutting back to help increase profit margins. An unnamed source has stated that the cuts will go far deeper than initial estimates with true figures above 200. Sales teams are the target of the layoff starting with the company’s leadership team on the west coast.

AOL’s restructuring is due in part to the company’s shift in advertising. The company has been moving towards a programmatic advertising platform which allows advertisers to buy ad space without the need for human sellers.

Account managers will be kept on board while sellers will take the brunt of the layoffs.

An official announcement from the company has yet to be released. Sources state that investors can expect an announcement today, January 30th.

AOL is not the only company that has recently laid off their advertising salesforce. Microsoft Corporation (NASDAQ: MSFT) announced just three months ago that the majority of their salesforce was to be laid off. Restructuring in advertising sales seems to be common among media giants as self-serving ad platforms continue to rise.

AOL is boosting their content division as layoffs loom. Sites, such as Engadget and Huffington Post, are two that can expect a major bump in staffing. Investors are leery of the layoffs as most advertising deals have been built through the company’s long standing relationships between sales reps and advertisers.

Mega media outlets are turning to automatic advertising systems that eliminate the need for a large advertising salesforce.

AOL, Inc. is down nearly 2% in early morning trading.

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