Top brass at AOL’s hyperlocal network, Patch, have been saying since at least the beginning of 2013 that they aim to achieve profitability by the end of this year. And during Wednesday’s second-quarter earnings call, CEO Tim Armstrong announced that Patch would undergo some drastic cuts to reach that goal in addition to a 25-percent decrease in expenses already instituted throughout the year.
If the heaviest reductions happen, Patch would lose about a third of its 900ish sites and more than a third of its workforce—Jim Romenesko is reporting plans to lay off up to 500 employees on Friday.
“We have segmented all the Patches into three buckets,” Armstrong said, according to the call transcript. “First bucket is established and successful Patches, the second bucket is emerging Patches that have all the signs and signals of being successful, and the third bucket is a set of Patches that may have traffic or revenue traction, but don’t have both.” He went on to say, in business jargon, that AOL planned to drop the bottom third of sites. “The vision for Patch remains simple,” he continued. “Put a platform in town that allows offline things to be done online.”
This language—that Patch is fundamentally a platform—marks a drastic shift from the company’s early days, most notably in the absence of the word “news.” Last year, in a CJR cover story, Sean Roach described Patch’s original mission this way:
The Patch idea was sold to me on the following premise: The backbone of the website’s offerings would be local news and information, with the goal being the digitization of a community—your town, online. Patch aimed to be the community newspaper and more, a hub for local businesses and a forum for community conversation: everything a local news outlet should be.
The move away from news and toward a “platform” has been happening for awhile now—Roach documented the shift as beginning in late 2010, when higher-ups began to issue standardized, fluffy content mandates that ate into local editors’ reporting time. That is, the shift started after Patch had already hired hundreds of journalists, many of whom viewed the company as a welcome lifeline away from the free-falling newspaper industry but who suddenly found themselves acting more as online community managers. Now, many of them may not have even that option.