AOL Will Lay Off Close to 500 Employees

By Mike Shields 

Verizon Communications Inc.'s AOL on Thursday plans to lay off close to 500 employees, said a person familiar with the matter.

Among the areas hit by AOL's staff reduction will be human resources, marketing, communications and finance, the person said.

A spokeswoman confirmed the dismissals, saying AOL is reducing "a small percentage of our global workforce."

In a memo to employees, AOL Chief Executive Tim Armstrong noted that between multiple acquisitions in the past year, the company had added over 1,500 new people, resulting in some redundancy.

"As we have settled into those changes, there are a number of areas that require consolidation to improve operations and limit the amount of hand-offs in our business processes," he wrote.

News of AOL's layoffs were first reported by Recode.

Verizon acquired AOL in 2015 for $4.4 billion. The wireless giant has said that deal was driven partly by a desire to take on Facebook and Google, the two dominant players in the online advertising business.

To that end, Verizon announced an agreement to acquire Yahoo earlier this year for $4.83 billion. That deal--expected to close next year-- has been complicated by revelations of a massive Yahoo data breach.

Verizon's General Counsel Craig Silliman said it was "reasonable" to believe that Yahoo's breach represented a material event that could allow it to change the terms of the takeover, the Wall Street Journal reported last month. However, Marni Walden, Verizon's executive vice president and president of product innovation and new businesses, said last month at the WSJD conference that Verizon hopes to go ahead with the deal.

Write to Mike Shields at [e-mail]

(END) Dow Jones Newswires

November 17, 2016 14:53 ET (19:53 GMT)

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