AOL recently gave a majority stake of Patch.com to an investment company called Hale Global. Hale is generally known for helping turning around struggling companies. During the time of the announcement, Hale said that they were intended to keep Patch’s 900 operations intact with no staffing decisions. Today, hundreds of employees were laid off as part of a reorganization. Media blogger Jim Romenesko posted an audio clip of Patch COO Leigh Zarelli Lewis announcing the layoffs.
?Patch is being restructured in connection with the creation of the joint venture with Hale Global,? stated Lewis. ?Hale Global has decided which Patch employees will receive an offer of employment to move forward in accordance with their vision for Patch and which will not. Unfortunately, your role has been eliminated and you will no longer have a role at Patch and today will be your last day of employment with the company. ?Thank you again and best of luck.?
AOL CEO Tim Armstrong is one of the co-founders at Patch and spearheaded the acquisition of the service. Patch.com lost around $200 to $300 million over the last few years so Armstrong received pressure to get rid of the service. He attempted to make the service profitable by firing hundreds of employees. That did not work so he sold it to Hale on January 15th.
[Source: NY Times]