Patch

Patch Hit With Sweeping Layoffs As New Owner Hale Global Restructures

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The ax came down at Patch today. TechCrunch has confirmed that a number of Patch employees were let go this morning with another round of layoffs happening later today. We’re hearing hundreds were laid off, focused mainly around editorial staffing. Employees are being told to pack their virtual desks and clear the premises today.

This is the second major round of layoffs in six months — 400 Patch employees were let go last August.

The effected employees will receive their yearly Aol bonuses, a payout for accrued vacation time and two months’ severance. By taking the severance package, the employees are agreeing not to sue Aol.

“This is sad but didn’t really come as a surprise to many if not all of us,” one fired Patch employee told TechCrunch today. “Everyone gave it their best shot, but in the end no one could make the numbers add up. They treated us well, even as we headed out the door, so personally I have no complaints.”

As Jim Romenesko reported this morning, Patch is being restructured in connection with the creation of the joint venture with Hale Global. Some employees will be kept on and fill unspecified roles at Hale Global.

Aol sold a majority stake in its hyperlocal news outlet to Hale Global on January 15th. Aol retained a minority stake. At the time, Aol stated that they were spinning out the brand.

Patch had long been a sore spot on Aol’s balance sheet. The outlet failed to become profitable after Aol acquired it in 2009. Patch is estimated to have cost Aol between $200 million and $300 million to run.

In 2012 Aol CEO Tim Armstrong made a commitment to turn Patch around. In 2013, sites were consolidated or closed and staffing was cut. Still, nothing seemed to help. Despite the belt tightening, Patch remained a monstrosity of a network, spanning over 900 local blogs.

These layoffs do not come as much of a surprise. Patch was burning through money and Hale Global wouldn’t have purchased it without a plan to turn it around. Laying off hundreds of employees is a quick way to shore up the balance sheet.

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