AOL will announce Friday that it is making hundreds of layoffs across its advertising sales teams.
TechCrunch, which is owned by AOL, reported earlier on Friday that the company was set to lay off “about 150” people, as well as consolidating some websites: gaming site Joystiq and Apple news site TUAW are folding into Engadget, while AOL Autos has been folded into Autoblog.
However, Business Insider understands the cuts within the ad sales team go far deeper.
One source, who asked not to be named, told us: “The sales team is getting annihilated today. Many sellers, sales directors, all regional directors of account management, strategy etc. At least 200 people but probably more.”
Among those on the block include AOL’s west coast ad sales leadership team, our source tells us.
“They’re keeping everyone form the ad.com side, and even promoting some. Those that are seen as ‘legacy AOL’ are being booted viciously,” our source said.
Meanwhile, the restructure will see those left on the account management side move from sales to operations, according ot our source.
They added: “They’re keeping most account managers, while firing many sellers, leaving the account managers vulnerable to abuse in the operations group, with no sales management behind them any more. Clients will be enraged that this team is left to pick up the pieces.”
Another source at one of the biggest global media agencies — i.e. one of those clients who could be enraged further down the line — told us: “The good people have been eking out and going elsewhere since before Christmas, so writing on the wall maybe.”
Why is the axe falling so severely and abruptly? TechCrunch is using the narrative AOL has been giving in its recent earnings calls (the next quarterly earnings are due in February): That the company is shifting its business toward programmatic advertising. Programmatic allows marketers and agencies to buy advertising space through automated means, so there’s less of a need for human sellers.
Our first source tells us this is mostly correct: AOL is moving toward more programmatic and platform-based products, while focusing its content efforts on the sites with the highest traffic, like the Huffington Post. But the best advertising comes off the back of the best relationships. And now AOL has fewer people left to build them.
An AOL spokesman confirmed to Business Insider an official announcement about the layoffs will be released today, but could not confirm a time.
The AOL layoffs come three months after Microsoft laid off the vast majority of its global advertising salesforce.
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