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Weekly Wrap: A Lesson from AOL – How Not to Do Merger Layoffs
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Sometimes, you can glean some great lessons about HR and people management practices from just reading the news.
Take the recent purchase of the Huffington Post by AOL, for example. Say what you will about the HuffPost (and I have) but one thing is clear: Ariana Huffington did a marvelous job building a business she could then turn around and sell to AOL for more than $300 million. Plus, Huffington now has a new role as content czarina for all of AOL’s websites and media properties. Turned out well for everyone, didn’t it?
Not exactly. It turned out great, of course, for Huffington and her minions at the HuffPost, but not so well for a lot of people who were toiling in the trenches creating content for AOL.
Even though AOL bought the Huffington Post and was the doing the acquiring, when layoffs of the overly large and now-combined staff came down, it was AOL people who got the boot, not anyone from the Huffington Post. As The Wall Street Journal reported:
AOL laid off reporters and editors who worked for its travel site and business, personal finance sites Daily Finance and Wallet Pop. It also cut across its news and politics sites, including Politics Daily, according to people familiar with the matter. Employees who were laid off started packing up their belongings on Thursday…
One person familiar with the matter said AOL had yet to decide whether to shutter any sites. None of the 250 employees who joined from the Huffington Post lost a job, this person said.”
Yes, you read that right. When AOL started slashing staff, no one from the Huffington Post got cut.
In most acquisitions, the lion’s share of the layoffs usually take place among the staff of the company that was just purchased. Now, you can point to times when that is not the case – such as when Hearst acquired the San Antonio Express-News and then turned around and closed (and got rid of the newspaper staff) of its own San Antonio Light – but it tends not to be the way it works. Generally speaking, the acquiring company has the upper hand in these sorts of things, so people at the acquiring company usually win out.
But not this time, and it looks like not only did AOL ditch their own people after this acquisition, but they didn’t handle the layoffs very well either. Business Insider gets the inside scoop from a now ex-AOLer who says:
Managers had no clue if anyone on their teams were getting laid off. They were called into a separate meeting as a diversion, and then those being laid off were called into another and axed in a big group setting.
They pulled 20-30 people into a conference room and told them they “Don’t have roles at aol anymore.” [Severance is] 1 week for every year worked.
It’s really quite appalling.
Managers came back after their meeting to find out people on their teams were gone.
Managers weren’t told beforehand or asked who on their team should go if necessary. And nobody knows how the hell they picked who got laid off, as some of them were absolute top performers in some cases 50-75% of some of the most successful teams/sites AOL has.”
Mergers and acquisitions are never easy, and as someone who has been involved in a few, I know first-hand that the process of combining staffs and letting people go is one of the most difficult parts of the process. But having a rational plan for how you are going to do it that makes sense on some level is essential to getting through it with a minimum of angst and upset.
Sounds like that wasn’t the case at AOL. Yes, the Huffington Post is certainly one of those disruptive media forces you hear about all the time, but did the disruptions from it have to extend to basic HR and people management practices that are sorely needed at the time of an M&A? Did AOL really need to abandon all of that?
You be the judge but like with so many mergers, the true test of whether this deal made sense won’t be known for years to come. This terribly managed layoff process may be just a bump in the road to a big, new combined company, or, it could be a hint of the struggles and difficulties yet to come.
Only time will tell, but one thing is certain – AOL’s track record at these things isn’t very good. Just ask anyone over at Time Warner.
Of course, there’s a lot more in the news this week than layoffs in the wake of the AOL-Huffington Post merger. Here are some other HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of HR and talent management. Yes, I do it so you don’t have to.