Here’s a business question: How can a company operate at the same level after slashing as much as two-thirds of its staff?
The answer, it seems, will be played out by Patch, the once-vaunted network of hyper-local news websites that AOL (AOL) sold to Hale Global earlier this month.
Employees were informed via a Wednesday conference call that the service was being restructured, according to a transcript of the call published by Jim Romenesko.
“Hale Global has decided which Patch employees will receive an offer of employment to move forward in accordance with their vision for Patch, and which will not,” said Patch chief operating officer Leigh Zarelli Lewis, according to the transcript. And to the unlucky group: “Unfortunately, your role has been eliminated and you will no longer have a role at Patch and today will be your last day of employment with the company. …Thank you again and best of luck.”
While as many as two-thirds of Patch’s employees are losing their jobs, the company reportedly told its remaining employees that all 900 Patch news sites will remain open.
Officials at Hale, Patch and AOL didn’t immediately respond to a request for comment.
The question will be whether Patch can continue to operate hundreds of sites with a drastically smaller staff. Even before the layoffs, the service had been criticized for its depth of journalism as well as the workload heaped upon its writers and editors.
But the bigger problem for Patch has been its business model. While it was created by AOL chief executive Tim Armstrong, the service has struggled to get out of the red. Last summer, AOL said it would shutter or partner 400 Patch sites as a way to jump-start profitability.
In an embarrassing episode for AOL, Armstrong fired Patch creative director Abel Lenz on a conference call, stunning employees and outside observers.
Local journalism is far from dead, but Patch’s approach didn’t take hold in some communities. A perusal of various Patch sites on Thursday morning showed that many of them were running content from third-party sites that had little, if any, local angles. A lead story on several Patch sites was a personal finance article from AOL’s DailyFinance about joint banking accounts.
With fewer employees dedicated to covering their communities, it’s unclear how Patch will hold onto the readers it already has.