The New AOL: A Lean, Mean Byting Machine

Just when you thought there wasn’t any one left to fire, AOL has told employees that it was looking for a mere 2,500 people to take a package and leave the company, representing a third of its workforce. Maybe, that seems like a strange way to go about things. Surely, there must be some deadwood among what, as of right now, is a total of more than 7,000 employees? Maybe that’s so, but there are two reasons why AOL is not slashing and burning, even at a moment like this:

1. Even before the arrival of chairman-CEO Tim Armstrong earlier this year from Google, AOL has already suffered hundreds upon hundreds of layoffs — the most recent, a flesh wound of about 100 people, coming just last week. The people that were, all things considered, easy to fire, have already gone. (Business Insider has a different take on this — that the voluntary layoffs allow a lot of high-priced senior vps to leave and save face — but I’m sticking by my speculation.)

2. Armstrong has gone about the cost-cutting process in a way that can only be described as Googl-y. His email to employees about the layoffs espouses an “Employees First” motto. Before today, this expressed itself in some highly participatory company initiatives, such as Project Everest, aimed at examining cost structures throughout AOL. Rather than being one of those top-down affairs, management has drawn on people throughout the company to bring their insights to the table.

The decision to pursue voluntary layoffs expresses “Employees First” in a different way, since, as Armstrong said in the memo, it’s as “an option that gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs.”  Sad, but true. (BTW, Armstrong has decided to forego his 2009 bonus, of at least $1.4 million.)

One thing these layoffs probably won’t mean is the end of AOL’s attempt at creating quality journalism for the Web, though one of my colleagues and I wondered about that earlier in the day. For one, if Armstrong is to leverage his strategy of creating premium advertising inventory, he needs premium content to go with it. And second, the journalists the company has hired are the last people in the organization that would be likely to take a voluntary buyout. They all know that, relatively speaking, AOL is a safe haven.

The layoffs are among a number of steps the company is taking to streamline as it spins off from Time Warner. These, courtesy of the folks at AllThingsD, also include selling ICQ, the instant messaging service that even before AOL’s own AIM, once ruled the world and Mapquest, now an also-ran in the mapping wars.