Update: CEO Tim Armstrong’s full memo to staffers.
AOL (NYSE: AOL) CEO Tim Armstrong took the stage at Bloomberg Media Summit and confirmed last night’s big news: the company is cutting 900 jobs; in India, 400 people were laid off and 300 jobs were outsourced and in the U.S., 200 media and tech staffers were let go.
Armstrong told his interviewer, Bloomberg Businessweek’s Eric Pooley that layoffs were an unpleasant necessity in order to ensure AOL’s growth amid the new realities of the content business.
He then turned to a renewed emphasis on women’s content at AOL: “Women’s role in the economy has shifted, and we have to reflect that.” He noted, for example, that women decide 80 percent of household purchases driven by advertising. It’s also a reflection of the fact that AOL has had a mostly female audience for a while.
The conversation then turned to whether AOL, and now with The Huffington Post in the fold, is a part of the “content farm” concept of journalism. “I’m going to say something controversial: technology is good for journalism,” Armstrong said, arguing that the company doesn’t ignore the human side of making editorial decisions. “We’ve hired 1,300 journalists last year — probably more than anyone else.” He also noted AOL’s recent hiring of several prominent journalists, including ex-Politico reporter Michael Calderone from Yahoo (NSDQ: YHOO). “And we’ll be hiring more.”
About 90 percent of the previous leadership at AOL has changed since Armstrong came in. “When I arrived at AOL, there was a $30 million line item. It took months to find out what that was, but I found out that those were retention bonuses. I stopped those. Now, when you cut that out, that’s a hard pill for people to swallow — they were going to get paid less.” Not all the veterans have left, Armstrong said. “One person on the management team, Julie Jacobs, who was not getting those retention bonuses, has been with the company for 11 years. She has been one of the best lawyers I’ve ever worked with and she represents someone who has remained with the company through the changes. I have to wake up every day and face the choice of 5,000 people lose the job or do a restructuring that will save those jobs.”
Right now, there’s no plans for any other large scale layoffs, but Armstrong issued a caveat saying that you can never look to far out ahead on these kinds of personnel issues. He reiterated that there will be more content hires, as he tried to move AOL to a “full-time model” from a freelance model.