Last week, AOL (NYSE: AOL) CEO Tim Armstrong told the crowd at paidContent 2011 that layoffs — aka “job changes” — were coming following the $315 million deal to acquire the Huffington Post. The layoffs started Thursday in India, where AOL’s operations are being dramatically downsized: 400 jobs lost, 300 outsourced, roughly 200 remaining, paidContent has learned. India currently accounts for nearly one-fifth of AOL’s close-to-5,000 employees.
They will start in a matter of hours with the AOL operations in India Sources tell paidContent a much smaller U.S. wave will follow and that the total number of jobs cut will be close to 900.
The deal closed Monday, making Arianna Huffington president and Editor in Chief of the new Huffington Post Media Group with the power to remake the content operations completely and starting the clock on the $20 million in promised merger “synergies.” The result on the content creation side should be a net gain when the Huffington Post staff is included, small solace to those losing their jobs.
Kara Swisher reported earlier tonight that the layoffs will be in the 400-500 range. I am told the total will be higher. The cuts do not affect ad sales, which is absorbing the newly enlarged HuffPo sales team, or the new network group.
On the editorial side, though, the acquisition means a considerable amount of duplication in numerous areas. Armstrong and Huffington have been open about the plans to keep some brands at AOL intact, like TechCrunch and Engadget, while going for what they call best in breed for the rest. The focus is on “high quality” journalism done through an “internet” organization structured more like HuffPo than AOL. Depending on who is affected, that spin runs the risk of suggesting those duplicated out of a job — Huffington referred to her education in HR “slotting” during our paidContent 2011 interview — are somehow not good enough for the new content combo. Given some of the names likely to be involved that would be a bad assumption.
AOL India is the hardest hit, with cuts coming across the board. Some 300 jobs, primarily in business operations are being outsourced to partners. The remaining 200 or so staffers and contractors will work on consumer products for India and Southeast Asia. The Bangalore operation had supported a number of U.S. content efforts and other projects; that no longer will be the case. Employees were told of the changes during an all-hands meeting.
AOL tells paidContent.org: “Moving forward, our focus in India will be on our core capabilities around building the most compelling consumer facing products primarily for the Indian and other Asian markets. We’ll be partnering with Mindtree and HP (NYSE: HPQ) to round out our business operations.”
The India move is not directly related to the merger. A source said restructuring talks have been underway for some time.