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AOL's Patch local news service cuts 350 jobs; additional 150 in limbo

AOL LLCVerizon WirelessMicrosoft CorporationTim Armstrong

AOL Inc. on Friday plans to lay off 350 employees who work for the tech company's Patch local news websites, Chief Executive Officer Tim Armstrong said in a conference call with AOL staff.

An additional 150 workers could lose their jobs by October, but are being retained temporarily while Armstrong searches for ways to inject outside money into the not-yet-profitable operation.

AOL has Patch websites for 900 communities. Armstrong has said 60% of them do well. The 40% of them that don't are being shuttered or are in limbo. If all the cuts go through, Patch's workforce would be cut in half, according to Bloomberg.

AOL said the moves represented an attempt to make Patch profitable.

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"Patch's strategy will be to focus resources against core sites and partner in towns that need additional resources," an AOL spokesperson said in a statement. "Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions."

Most Patch websites focus on a specific community. They are run by one or two editors who produce most of the content, including reports about local government, schools, shops and neighborhood events.

However, Patch said it saw a 70% increase in posts from other contributors during the second quarter of this year. It credited a new mobile app that has posting capability for some of the jump.

AOL spent $300 million to develop the Patch network, but revenues haven't been as high as expected. Armstrong had hoped for $40 million to $50 million from Patch in 2012. The actual number was less than $35 million.

Patch said traffic on the network was up 10% between April and June compared with the same period last year.

"The Patch team across the country has served and will continue to serve communities with journalism and technology platforms," the AOL statement said. "The people leaving Patch have played a significant role in making Patch an integral part of the communities it serves – and we thank them for their hard work and passion for Patch.”

On its website, Patch currently lists one open position -- for a mobile Web developer.

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