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March 14, 2011

Firing Employees "The AOL Way"

Most of us in the tech world know how AOL apparently treats its employees, and this is not just  an outsider view.... but it comes straight from the ex employees themselves. While its true that we do not have any " valid documents to say that these are indeed AOL former employees or someone  faking them .. but in a  way as , not just everyone who speaks ill about AOL  are former employees. and not just everyone who  speaks good of them are from the Company .. so  we  would go by the "Common Feeling " of the Bloggers,Industry Sources and various Tech sites and Journalists who have interacted with AOL over some point of their careers. 

 However let me clarify , that this post is not concerned with the issue of sacking people. In an competitive economy , both employees and employees have the right to leave hire or fire.. Firing employees is a business decision that deals very less with   human emotions  and has more to do with  decisions . However its the way " Companies Treat  people .. who are their  biggest and fundamental asset that is open to debate"

Business Insider  had published an article last Friday, where is  " explained" how  AOL fired their employees in the most disgusting way possible ." which I am republishing here.

An ex-AOLer reached us this morning to say he thought it was "disgusting" the way AOL handled layoffs yesterday.
According to this guy, people got fired in groups of 20 to 30.
Managers had no clue if anyone on their teams were getting laid off. They were called into a separate meeting as a diversion, and then those being laid off were called into another and axed in a big group setting.
They pulled 20-30 people into a conference room and told them they "Don't have roles at Aol anymore." [Severance is] 1 week for every year worked.

Managers came back after their meeting to find out people on their teams were gone.Managers weren't told beforehand or asked who on their team should go if necessary. And nobody knows how the hell they picked who got laid off, as some of them were absolute top performers in some cases 50-75% of some of the most successful teams/sites AOL has. And yes You dont ask Questions at AOL.. you follow them ..

The Indian Team at Bangalore has seen its employees reduce drastically after theis latest firing .Exactly a year ago, TOI had interviewed AOL CEO Tim Armstrong on a visit to Bangalore, and this is what he had to say about the Bangalore operations: "AOL is now looking at aggressive changes, not an incremental turnaround. This has to start with resources and people. And Bangalore represents a big part of what we are building AOL into. Historically, it has been a call centre and outsourcing destination. But today, we are refocusing it towards platforms and technology, towards providing technical leadership. We are planning to invest heavily in Bangalore, into developing product skills. We are hiring some of the best engineering talent. We will do more and more products out of Bangalore, as also provide support for other products from here. It will be a centre of excellence for our wireless and mobile work."

Armstrong, a former Google executive, was brought into AOL to turn it around after it was spun off from Time Warner in 2009. AOL has seen several flip-flops in its lifetime, including its disastrous merger with Time Warner in 2001. Those flip-flops seem to be continuing under Armstrong

Hoever this is much less about India or about any countries Its more about  how fast AOL changes their "strategy"AOL has spent the last five years building up proprietary content brands like Engadget, WalletPop, and FanHouse. For a while, including after AOL's new management arrived, these were said to be the future of the company. As recently as four months ago, in fact, AOL ponied up $25-$40 million to buy another proprietary content brand, TechCrunch, which seemed in keeping with this "proprietary brands and content" strategy.

But now, it seems, everything has changed.By firing most of its FanHouse employees, licensing the brand, and outsourcing most of its sports content to Sporting News, AOL has gone back to the "anchor tenant" model in the sports category.  And it has done the same thing in real-estate and health. 

 As Business Insider's  Henry Blodget asks :Will TechCrunch and Engadget, et al, be the next sites that are nuked and licensed out to third parties? If not, why not? Why bear the big costs of staffing and running those sites when you can go out and find other folks to create the content more cheaply (to, in fact, PAY you to distribute the content)?

In other words, if it is the BRANDS and DISTRIBUTION that matter, and not the CONTENT (as is apparently the theory with FanHouse), why not blow out the expensive talent and just license the brands to the highest bidder? Won't that, too, improve the bottom line?