By Mark Sweney and Mercedes Bunz: Bebo is cutting jobs at its UK operation and freezing commissions from its web TV production arm, which has been responsible for groundbreaking shows including KateModern.
The social networking website has been forced to make cutbacks to its UK, US and Australian operations following an announcement by its parent company, AOL, that about 100 employees from across its total operation would be cut.
Bebo has entered into a consultation process with UK staff, with existing web TV shows continuing to run until current commissions finish up at the end of the year. Bebo’s online TV shows have included KateModern, Sofia’s Diary, The Secret World of Sam King and The Gap Year.
The company employs around 20 staff in the UK and it is understood the team will be cut back to a minimum.
AOL, which has come in for criticism over the $850m it paid to acquire Bebo in 2008, admitted today that to drive profitability it has to refocus the business.
“We are in the process of re-aligning the Bebo business and need to make sure that our resources are aligned with our new business mode in order to execute effectively against our future vision and stay competitive,” said a spokeswoman for AOL (NYSE: TWX). “We are therefore required to make some difficult decisions about the future of our organisation and its people in order to stay competitive.” The company added that it may return to web TV productions but admitted that, with a greatly reduced staff count, any plans were now on the back burner.
Bebo claims not to have lost money on any of its web TV ventures: all have been co-funded by sponsors or advertisers from the commissioning stage.
“Bebo remains a start-up at heart and as such remains a relatively small team with limited resource and in order to execute against its future vision it must focus its efforts,” said the spokeswoman.
“Its focus now and for the foreseeable future is to augment its core functionality, rapidly innovating in a number of key areas to further enhance its user experience and increase its user base, and commit its attention to better understanding its users, amongst other things.”
The cutbacks at Bebo’s UK operation follow the appointment in July of Stephane Panier to the position of global chief executive for the company.
Panier took over 14-months after Joanna Shields, who engineered the sale of Bebo to AOL, relinquished the role. Shields left AOL in May and re-merged in a new digital media venture with Elisabeth Murdoch, chief executive of Shine, in September.
The wider restucture of AOL, spearheaded by chairman and chief executive Tim Armstrong, comes as the company prepares to demerge from parent Time Warner through a stock market flotation.
This article originally appeared in Â© Guardian News & Media Ltd..