Next week will bring a much-anticipated "nuclear" round of layoffs to AOL, insiders believe, part of an internal shift the CEO is describing as a cultural revolution. Indeed, some jobs are literally going to another culture, offshore, we hear.
The internet conglomerate has already indicated it plans around 1,400 layoffs this quarter, cuts Business Insider heard were to come next week. We hear the same, with one AOL tipster indicating they will come Wednesday, and another saying Thursday seems more likely, per the company's traditional preference for Thursday layoffs.
Whatever the precise date, managers are already preparing for what to tell their underlings. CEO Tim Armstrong (pictured), the former Google ad honcho, wants to impress upon surviving employees that the company has a clear strategy built around AOL's high-quality "winner" projects — the "loser" projects having been marked for death — and an aggressive expansion into promising areas like mobile internet and local websites, including a ramping up of operations at his former company Patch. There will also be a dedicated team formed to strike search deals, presumably search advertising specifically. The whole thing is supposed to amount to what Armstrong is said to have called a cultural revolution.
More finesse will be required to sell the troops on AOL's expansion in India, where hiring is planned despite the U.S. cutbacks. This is the company formerly known as America Online, after all, and one of its troops described to us as "nuclear" the cuts AOL is planning stateside. It would seem the company hasn't blunted the impact of its mass firings by pre-announcing them.
AOL plans significant additions in India, including at least 60 software architects and database administrators, plus further staff for its network operations center, managers have been told. AOL is also looking to make current interns and contractors in India full-time employees.
Here's how the outsourcing will be sold to U.S. staff, according to the aforementioned managerial briefings:
- It's a long tradition: AOL has been hiring in India since 2000.
- We're literally starving — for more profit: AOL has a margin problem and needs to get into the high 20 percentages. Or at least, that's the official line.
- All the cool kids are going it, along with the distinctly uncool kids: Google is in India, along with its way-less successful rival Yahoo, as are the suits at IBM and HP.
- We need to control costs: And by "costs" we mean your former coworkers.
Growing revenue is one thing; all signs are that Armstrong is looking to build a lean, mean and aggressive internet content company. Good for him. But it gets awfully hard to innovate when managers, designers, writers and coders in the U.S. have to collaborate with teams on the other side of the world, many time zones away. So hopefully Armstrong will leave a sufficiently large number of programmers stateside, rather than foolishly chop off a small but crucial slice of his U.S. staff to save an even smaller percentage on salaries.
Hopefully, too, he'll bear in mind that no revolution is sufficiently complete if it still leaves room for this sort of endemic corporate doublespeak. Just tell your staff the American programmers were too expensive and wouldn't work nights, and be done with it.