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.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

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

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In