NEW YORK ( TheStreet) -- AOL (AOL - Get Report) CEO Tim Armstrong followed through on his infamous fiery phone call a week ago by actually firing roughly 500 employees at the media company's locally-focused news service, Patch.
Armstrong, who later apologized for the manner, though not the substance, of the firing of his former creative director Abel Lenz, nonetheless made official on Friday what had been indicated for more than a week: Patch eliminating half its workforce in hopes of finding a business model that works.
The one-time Google (GOOG) executive, who came to AOL to save it, reportedly said 60% of Patch sites will remain, while 20% will hopefully find a partner in order to continue operating, and another 20% will be consolidated or closed.
In a statement from its media relations office, AOL said Patch "is taking steps to move to profitability," adding that "there are sites that we will be consolidating or closing." Indeed, Armstrong has been under increasing pressure to staunch the bleeding at the ambitious, though possibly ill-conceived, hyper-local news venture.Patch, which focuses on covering neighborhood events and activities such as school board meetings and local affairs, has struggled to capture the advertising needed to support overhead of more than $125 million. Cutting staff may be the path to profitability, but then again, maybe not. Either way, AOL shares have lost 6.3% since Armstrong made news himself by firing Lenz during a live on-air employee phone call held at a gathering of his New York-based staff. AOL was dropping 1% to $35.11 in Friday trading. The recording was obtained by Romenseko, the all-purpose media industry blog: Armstrong Talks Patch, Fires Employee. It makes for rough or entertaining listening, depending on your view. And today marks the two-week anniversary of Time Warner Cable's (TWC) blackout of CBS (CBS) programming for customers in New York, Los Angeles and Dallas, and a few other areas around the country. At issue is a disagreement over retransmission rights whereby the cable-TV operator has balked at paying fees which the network asserts it is worth. While the two sides do remain in talks, the opening of the NFL season looms as an ominous deadline three weeks from Sunday. Hey, CBS, Time Warner Cable: Football Season Is Coming