AOL to Lay Off 200 People After Huffington Post Merger

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CEO Tim Armstrong also announces the company is reducing its online brands and sites from around 340 to about 40 to focus on the strongest ones.

NEW YORK - AOL has decided to cut around 600 jobs and move around 300 more to outsourcing partners as part of operational changes, chairman and CEO Tim Armstrong said here Thursday.

RELATED: The Hollywood Reporter's AOL strategy issue, in which Armstrong denied there would be layoffs.

The cuts include around 200 layoffs in the U.S. tied to the recent acquisition of the Huffington Post, he said.

He told the 2011 Media Summit, organized by Digital Hollywood and sponsored by Bloomberg, that he announced to AOL staff Thursday morning three things that led to cuts and reassignments - the effect of the integration of the Huffington Post, a reduction in the number of AOL's brands and sites, and changes in AOL's India operation. Overall, around 900 jobs are affected, he said.

In India, about 300 staffers will move from AOL to outsourcing partners, while around 400 will lose their jobs, he told The Hollywood Reporter.

Armstrong told the conference that the Internet company is reducing its online brands and sites from around 340 to about 40 to focus on the strongest ones. He didn't mention the fate of specific brands.

Saying that he has a different opinion from Silicon Valley folks in this regard, Armstrong predicted that in the future,  people won't have 50 apps on their mobile devices, but "a set of brands that will allow you to navigate and curate your existence." AOL wants its brands to be among those.

Asked about the benefits of the Huffington Post deal, which has led to a decline in AOL shares so far, Armstrong predicted the stock would eventually rise.

AOL has been an Internet company in terms of business, but not always in terms of organization and infrastructure, Armstrong said, citing that there were maybe 400 content engineers and as many editorial staffers. An Internet company should have  fewer engineers that build systems that allow many editorial people to create content, he argued.

Asked about Arianna Huffington, who is now overseeing the company's editorial operations, Armstrong said: "She will turn out to be "a very lynch pin talent for us" because she's  "fearless and tireless."

"We'll end up being a better content company," he said.

Armstrong also answered questions about AOL before his time and how he is managing things differently.

He said AOL had spent $9 billion on acquisitions before him, but that use of cash "didn't lead to success."

Armstrong said "excess cash is like a rich uncle" whose presence never forces you to learn how to live on your own.

By the second half of the year or 2012, "AOL will be back in the fight," Armstrong vowed, saying the company was on the ropes mindful of a scene from Rocky 3 when he joined.

Asked about the level of top executive turnover since his arrival at the company, Armstrong estimated it at 90 percent. He said he cut out $30 million in retention bonuses, adding: "That's a very hard pill to swallow" for many.

Discussing partnerships with such female stars as Heidi Klum and Queen Latifah, Armstrong on Thursday also reiterated that women are "a huge opportunity for us."

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