AOL: UK Job Cuts Will Be "Significant"
AOL's job cull and $200m re-shape ("Project Everest") has begun: here's an update on what it means for UK and other European AOL staff.
Media jobs in the UK just got a bit scarcer as AOL starts forcing through over 1,000 layoffs to supplement its voluntary redundancies last year. It has shut German, Spanish and Swedish operations in a bid to shed 2,500 jobs from its global workforce. Predications are that the UK will see a "significant reduction" according to the Guardian newspaper. Ad-serving site AdTech will be retained, praised by AOL CEO Tim Armstrong as an asset that had been forgotten following the company's unhappy merger with Time-Warner, according to ClickZ's blog.
AOL is looking less like a shining knight for Bebo, the social networking site called AOL's "new youthful Trojan horse" in 2008. AOL scooped Brit entrepreneur Michael Birch's network for £417m in 2008, a few years after Rupert Murdoch's News Corp shelled out $580m for MySpace. Neither has gained the traction of Facebook and now Twitter. AOL's promise was to "supercharge the monetisation of Bebo" but it's now effectively been spun out by becoming part of AOL Ventures. Bebo is planning to cut one-third of its workforce, having already pared its headcount back last year.
According to Silicon Valley Insider, at least two companies are already keen to interview AOL's layoff victims, so those who've lost their jobs will hopefully not be out of work for too long. But the trouble with any voluntary redundancy scheme is that top talent moves first -- either because they are confident they'll get another job or because they see the writing on the wall.
Even with the necessary 'rationalisation' BNET's Erik Sherman predicts any AOL recovery will be a steep climb (hence Everest?) So was Armstrong's offer of doing without his 2009 bonus the right one? He's taking the flak for AOL problems that weren't really of his making, and I wonder how it plays with other senior execs within the business.
What do you think: the right idea or an ill-judged sacrifice?