Media Money with Julia Boorstin

AOL Fires and Hires as it Turns to New Strategy

It's a rough time for AOL employees — up 1,200 of them will get pink slips over the course of the week. Some of them got the bad news Monday; more layoffs are coming on Wednesday. These layoffs are part of AOL's plan to shed 2,300 jobs: a third of its employees. A slimmed-down work force is a key part of the company's restructuring as an independent company — it spun off from Time Warner in December.

But while AOL fires long-time employees, it's also hiring employees to help build new competency in content creation.

The company continues to hire new editorial workers—now it has some 400 full time editorial employees, including nine Pulitzer Prize winners. When AOL hired New York Times writer Saul Hansell to oversee, its new content management program, the company sent a message that it's going after top tier journalists. Seed will allow AOL to assign stories to an army of freelance writers around the country. But as CEO Tim Armstrong looks to develop Web sites like Engadget and Politics daily, he'll also continue to hire internally. Lucky for AOL, there are plenty of unemployed journalists out there.

What's next for AOL?

There's been lots of talk that it should sell Bebo, a social network it shelled out $850 million for in 2008. If AOL is all about monetizing content online, does Bebo fit with that? Especially with such steep competition from Facebook and MySpace, would AOL want to cut its losses on this social network.

The question then is, who would want to buy it?

Questions?  Comments?