AOL To Lay Off a Third of Employees. Then What?

As AOL spins off from Time Warner, it's undergoing a dramatic overhaul as an online content provider. But like many a makeover, this will require shedding some weight. Well, a lot of weight. AOL is looking to lay off about 2500 employees -- a third of its staff. What is AOL trying to do, again?


Build a journalism empire, of course! From politics and finance to the smallest nichefied crannies of content, AOL is trying to shed its dial up cocoon and hope the butterfly underneath can survive in a crowded media network ecosystem. I think this is a bold strategy -- and AOL certainly needs to go bold at this point -- but let's talk about this cocoon for a second.

Dial-up still makes up about half of AOL's revenue. That's a lot of revenue to make up with a new business model that basically relies on making online journalism work. That goal has proved elusive for many companies. AOL is new to the journalism game, but that's an advantage. They can focus on hiring web-savvy minds rather than try to digitize a fusty newsroom and teach grizzled vets to blog. I'm not going to count out Tim Armstrong or the company, but as a 33 percent layoff mandate suggests, it's going to be a rough transition period.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

A New York City Minute, Frozen in Time

This wildly inventive short film takes you on a whirling, spinning tour of the Big Apple

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Faces of #BlackLivesMatter

Scenes from a recent protest in New York City

Video

Ruth Bader Ginsburg on Life

The Supreme Court justice talks gender equality and marriage.

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In