AOL lays off 500 employees in restructuring with focus on mobile, data and video

AOL will announce layoffs of five percent of its staff today, with 500 employees expected to lose their jobs.

In an interview yesterday, AOL CEO Tim Armstrong said that most of the cuts will come in its corporate units, while resources will be shifted more at mobile, video and data offerings going forward.

“The layoffs are related to a 2017 strategy where we will add to our business,” he said. “These are super targeted by area and we will be re-growing especially in video and mobile.”

The cuts come after AOL added about 1,500 workers this year from an advertising deal with Microsoft and its purchase of Millennial Media, which prompted the consolidation to improve financial performance.

AOL, a company which has gone through many organizational iterations over the years before it was bought by telecom giant Verizon last year, is currently split two parts, media and platforms. Most of its content properties like the Huffington Post and TechCrunch are in the media unit, while its advertising technology is in the platform groups.

Armstrong said the layoffs are not related to current discussions AOL execs are having with Yahoo counterparts about integration between the two companies. Later, there will also be plans for Yahoo itself too.

Verizon said earlier this year that it would pay $4.6 billion for Yahoo, but the completion of the acquisition remains mired in issues related to a breach that impacted 500 million customer accounts.

Yahoo is investigating the hacking, which sources said appears more serious than the company originally reported. Yahoo itself reported last week that the breach took place earlier than was previously reported. The situation has prompted Verizon to seek changes in the deal’s price — of upwards of $1 billion — to protect it from potential liabilities.

As Verizon and Yahoo continue those talks, AOL and Yahoo will continue to discuss possible integrations and to determine which Yahoo execs could be part of leadership. AOL, for example, recently lost its top sales exec Jim Norton, a position that most obviously would go to Yahoo’s chief revenue officer Lisa Utzschneider.

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