AOL Lays off 500 at Patch Division

AOL said Friday it is laying off about 500 employees at Patch, or about half of the total workforce working for the local news site division. 

The New York-based media company is also closing or consolidating about 150 of the 900 news sites that are designed to compete with local newspapers for online viewers and local merchants' advertising budgets. 

"Patch's strategy will be to focus resources against core sites and partner in towns that need additional resources," the company said Friday in a statement. "Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions."

AOL CEO Tim Armstrong

Shares of AOL, which owns the Huffington Post and TechCrunch, fell 0.7% Friday and ended at $35.21.   

The layoffs had been anticipated after AOL CEO Tim Armstrong warned employees in a meeting on Aug. 9 that a round of job cuts was coming and asked those who didn't believe in the venture to voluntarily leave. 

During the closed meeting -- a recording of it was obtained by JimRomenesko.com, a media news site -- Armstrong also fired a creative director on the spot for using his camera, leaving the attendees in stunned silence. Armstrong later apologized for the way he fired the employee. 

Armstrong also fired Patch CEO Steven Kalin earlier this month. Bud Rosenthal, who was and remains AOL's president of paid services and membership, assumed operational control. Armstrong co-founded Patch in 2007, betting that readers would flock to websites that focused entirely on news and developments in their neighborhoods.

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