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by Stephen Logan on 10th March 2011
It has been revealed that AOL are laying off some 900 staff in order to pave the way for Arianna Huffington and her HuffPo empire. Not good. In fact that’s 20% of their entire workforce being shelved.
Strangely the 200 likely to go in the United States are primarily in the “media and content-production” roles [see: AOL to cut 20 percent of global workforce - source | Yahoo]. This is certainly out of keeping with recent announcements that suggest they want to churn out 55,000 pieces of content a month [see: Huffington Post to Join the AOL Content Farm].
There was always likely to be a little upheaval following the $315 million acquisition of HuffPo, but few would have predicted it would be this sudden or severe. This seems to me like a confused message.
Okay, so they’re going to be bringing on board the expertise from HuffPo, but in order to expand, it would seem prudent to keep hold of as many writers as possible. Although, I’d not be in the least bit surprised if they were looking into cheaper ways to get content; perhaps even incentivising it as a platform for writers to gain exposure without any fiscal reward – just as the Huffington Post is doing currently.
This kind of free economy is shaky at best though, particularly as writers can easily contribute to their own blogs and get decent pay through freelancing. A number of HuffPo contributors have already been slightly perturbed that their content has been used to help Arianna pocket $315 million. In fact, many have gone on strike or walked out entirely [see: Why our writers are on strike against the Huffington Post | Guardian Comment is Free].
Claims of exploitation aren’t necessarily conducive to continued success.
AOL also has to be a little concerned about the recent Google shenanigans. If they’re producing these 55,000 pieces of content (written or video), how much of that is likely to be 100% unique and deemed of high enough quality to rank well? A lack of traffic means ad revenue could falter and their big gamble on content could be another painful mistake in a far from spotless history.
These redundancies may just be a part of the transitional process and continued growing pains of AOL, but it will do little to cheer worried shareholders – particularly with stocks slipping by another 1% following this announcement [see: AOL cuts 900 jobs after HuffPo buy | CNN]. Better days may be ahead for the company, but it’s a future that is currently lacking any real direction or certainty. Google’s Panda/Farmer update scarcely have been timed worse and this is more bad news that the company can do without.