by RB Capuz

Created on: March 12, 2011

Days after finalizing its acquisition of The Huffington Post, Internet giant AOL announces that it would cut over 900 jobs. The company is planning to reinvent itself to become one of the major players in online news.

About 700 of these employees — or close to 20 percent of the total workforce of AOL — are based in India. Unfortunately, only 300 of them will be absorbed by third-party companies like MindTree and Hewlett Packard, both providing services to AOL. The mass layoff is somewhat expected as Tim Armstrong, the chief executive of AOL, already hinted a week prior that the acquisition of The Huffington Post—a $315 million deal which was completed on March 7—would result in job cuts.

AOL is also planning to increase the number of personnel involved in content production from the current 50 percent to 70 percent, enabling the company to rely less on freelance journalists. Armstrong, who came from Google two years ago, envisioned AOL to be a “content-driven company” when it comes to the media side of the business. The acquisition of The Huffington Post only solidifies AOL’s position in the online news market. The company already purchased the technology blog TechCrunch in September and has invested in local community news site Patch as well as the citizen journalism project aptly called Seed, among other online investments. AOL is one of the top gateways to the Web, along with search engine giant Google, operating systems maker Microsoft and pioneering web portal Yahoo!.

Despite AOL’s acquisition of her company, Arianna Huffington would still be in charge of the Huffington Post Media Group as editor-in-chief. She will also serve as president for AOL Media and AOL local properties.

Currently, The Huffington Post employs about 150 editors and writers. The online information source that was launched by Huffington in 2005 has been visited by more than 25 million people each month – thanks to its wide array of content that include news articles and blogs from known personalities.  

The site gained phenomenal traffic growth at a time when readers started looking for free news online rather than on actual newspapers. This migration of readers from print to online contributed to the steep drop in print advertising and circulation of US newspapers. Tapping into the unlimited stream of online traffic, a number of big publications ventured into digital publishing - some of them even have subscription fees.  

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