AOL to cut 500 job in effort to restructure business and focus on mobile as well as video advertising

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AOL has announced layoffs of 5% on Thursday. That’s 500 employees who will be losing their jobs.

According to a memo sent by CEO Tim Armstrong, AOL plans to restructure the business into two units: Media to include search and communications as well as Platforms which will be company’s new advertising division.

AOL announces job cuts

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Source: advertising.aol.co.uk

According to a memo sent by CEO Tim Armstrong, AOL plans to restructure the business into two units: Media to include search and communications as well as Platforms which will be company’s new advertising division.

The cuts are largely affecting its corporate and sales business unit as it shifts focus to mobile and video functionalities.

Armstrong reiterated:

In this undated photo provided by Google Inc., of then Google Americas Operations President Tim Armstrong. Armstrong is becoming the latest CEO of AOL, raising hopes that he will be able to turn around Time Warner Inc.'s struggling Internet unit, it was announced Thursday, March 12, 2009. (AP Photo/Google, ho)** NO SALES **

“The more we differentiate our strategy and products, the more we move from strategy to execution, and the more we speed up our product delivery, the more value we will confer to our consumers and customers – and that is where our focus needs to live.”

The announcement follows the acquisition of Millennial Media which resulted in AOL adding around 1,500 workers.

AOL added the layoffs weren’t part of any communication with Yahoo to possibly integrate the company, following a decision to acquire the internet company.

Here’s the full memo to AOL staff from Armstrong:

“AOLers –

Over the last 3 months, we have solidified the operating plan we will use to propel AOL to our 2020 goals and mission of Building Brands People Love. Our process forced us to look at our strategy, goals, and organization in relation to the dynamically changing industry we compete in as a company. Based on our strategy and the changes we see in the industry, we are reshaping parts of the company today.

The company will be focused on two simple global business units: Media (including Search and Communications) and Platforms and will be aligned to drive a talent and operations plan in line with profitability.

Mobile, video, and data are the key growth drivers of that strategy and the company will be putting resources into each of these areas.

There a few important principles and factors driving our strategy decisions for 2017:

  1. Despite being in the midst of transitioning to a business model that heavily relies on off-network content distribution and programmatic advertising, we will operate profitably in the new industry paradigm. We have always chosen to make changes ahead of the curve and we are doing that again today.
  2. Due to the deals we have done over the past 12 months, we have added over 1,500 new people to the company. As we have settled into those changes, there are a number of areas that require consolidation to improve operations and limit the amount of hand-offs in our business processes. This will impact a small percentage of the global workforce.
  3. Our planning process was built around the strategy and around the best way to operate that strategy. Each area within the company was reviewed through the lens of our strategy and while we will be reducing some areas for 2017, other areas will add headcount and resources.
  4. The talent we have at the company is very strong. The changes we are making are about setting the company on a path to successfully operating in today and tomorrow’s reality.

We have a mission and a responsibility to continue to move AOL into the future – something we have done a good job of in the past. The best way for us to grow is to move in front of change rather than be moved by change. The more we differentiate our strategy and products, the more we move from strategy to execution, and the more we speed up our product delivery, the more value we will confer to our consumers and customers – and that is where our focus needs to live.

Teams across the company will be meeting with their managers today to discuss the changes. The talent affected at the company today is important and we will come together to help our people take the next steps in their careers.”