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posted: 1/29/2014 8:29 PM

Report: Patch lays off employees

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By Richard R. Klicki
rklicki@Wdailyherald.com

Patch, an online local news organization with operations in Chicago and the suburbs, laid off a significant number of employees Wednesday as new majority owner Hale Global helped parent company AOL restructure the financially struggling operation.

Media blogger Jim Romenesko reported sources said as many as two-thirds of Patch's editorial staff have been laid off nationwide.

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Patch Chief Operating Officer Leigh Zarelli Lewis told staff in a conference call Wednesday morning that "Hale Global has decided which Patch employees will receive an offer of employment to move forward in accordance with their vision for Patch and which will not." according to a transcript posted on Romenesko's blog.

Calls to New York-based Hale Global and Virginia-based AOL were not returned Wednesday, and the companies have not commented publicly about the layoffs.

A search of 57 suburban Chicago Patch sites found the profiles and contact information of 24 local editors, representing 42 communities, had been taken down. Contact information for five local editors, representing 15 suburban sites, were still active as of Wednesday.

One local Patch editor, who asked to not be identified, confirmed he and a number of editors in the Chicago area were let go. He said Patch staffers knew layoffs were inevitable given the troubles the site had in making a profit.

"It was a bold experiment, and it continues to be a bold experiment as they look to go forward," he said. "We held every hope to be among the lucky ones, but it was not to be."

Technology news website TechCrunch reported the terminated employees will receive their yearly AOL bonuses, a payout for accrued vacation time and two months' severance. By taking the severance package, the employees are agreeing not to sue AOL, according to TechCrunch.

AOL sold a majority share of Patch to Hale Global on Jan. 15 after the Virginia-based company struggled to make the local sites profitable.

AOL acquired Patch in 2009. The websites used a combination of local reporters and user-submitted content to provide local news, and many of the local editors hired were professional journalists who had been laid off from traditional newspapers during the Great Recession.

At its peak, Patch covered more than 900 communities nationwide.

But the company was unable to generate enough advertising to make Patch profitable. In 2012, AOL CEO Tim Armstrong renewed his commitment to the site by trimming costs and closing underperforming sites. Last August, AOL laid off 400 Patch employees.

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