AOL is set to announce a sizeable round of layoffs on Thursday, sources told Business Insider.
AOL’s direct sales team has been materially affected by the staff cuts, according to separate sources, who said a large number of roles were being eliminated, although they could not confirm how many.
An AOL spokesperson told Business Insider: “We are impacting a small percentage of our global workforce.”
AOL is also planning to wind down the Be On branded content network it launched in 2013 and fold it into the wider One by AOL team, a source told Business Insider. An AOL spokesperson told Business Insider that the suggestion Be On was being wound down was “not accurate.”
A page related to Be On still exists on the AOL advertising website, but it is not easily navigable from the homepage and no longer appears under its list of “properties,” alongside the likes of The Huffington Post and Microsoft, with which it has a deal to sell display ads across MSN, Xbox, Skype, Outlook, and Windows.
When that deal was signed back in June 2015, around 1,200 Microsoft Advertising direct sales employees shifted to AOL.
The news comes as AOL prepares to become a merged entity with Yahoo. AOL parent company Verizon announced in July its intentions to acquire Yahoo for $4.8 billion.
The thinking behind the layoffs is likely to be an exercise to de-duplicate roles that will exist once Yahoo becomes a Verizon company. Sources told Business Insider that rationally, this makes sense, as Yahoo generates more in direct sales revenue than AOL — and Yahoo’s severance packages are a lot larger than those at AOL.
The Verizon/Yahoo acquisition process has been prolonged, however, owing to Yahoo confirming in September it had suffered a huge hack attack, affecting at least 500 million users.
Yahoo gave Verizon just two days notice before the public knew it had been breached by a “state-sponsored” attacker. Verizon’s general counsel said in October the company has “reasonable basis” to believe the attack had “material impact” on the deal. Verizon is reportedly seeking $1 billion discount off the sales price as a result, although Verizon CEO Lowell McAdam dispelled these reports as “total speculation” in October.
A string of senior executives has left AOL in recent months — many of which were considered CEO Tim Armstrong’s closest lieutenants.
Marta Martinez, AOL’s SVP of advertising, left the company a few weeks ago and was the company’s most recent senior departure, sources told Business Insider. Her exit follows that of AOL’s president of media brands Luke Beatty, who left earlier this month; global sales chief Jim Norton who left in October and landed a new role at Condé Nast; and executive vice president of AOL content and consumer brands Jimmy Maymann.
Maymann was brought on board by another former AOL employee, Arianna Huffington, who announced in August she was stepping down from the Huffington Post media company she founded in 2005 and sold to AOL in 2011 to focus on her new startup, Thrive Global.
AOL laid off around 100 staff in December last year, which hit two-thirds of its membership division, plus staffers in centralised roles such as marketing, advertising, and social media.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.