Judgment Day at Local Patch Websites

[UPDATED Friday, Aug. 16, 2013 | 9:15 a.m.] America Online will begin laying off employees at its network of Patch websites today, but as yet it is not known if any of eight local sites will be closed or sold.

Patch currently has separate sites covering Pasadena, Altadena, Sierra Madre, Arcadia, San Marino, South Pasadena, the Glendale-Montrose-La Crescenta area, and La Cañada Flintridge.

Media analyst Jim Romenesko reported on his site today that “AOL chief exec Tim Armstrong said in a 9-minute conference call this morning that 40% of the Patch workforce will lose their jobs today. (That’s about 480 people.)”

Armstrong said 60 percent of the Patch sites will continue, 20 percent of them will partner with other outlets, and 20 percent will be consolidated or completely closed, Romenesko reported.

Patch was a pet project of AOL’s Chief Executive Officer Tim Armstrong, who championed the high-reaching project to roll out 1,000 local websites nationwide over three years in a bid to make his brand of  hyperlocal, web-based journalism a viable business model.

After years of mounting financial losses, Armstrong faced mounting demands to make Patch profitable.

Last Friday, Armstrong announced hundreds of layoffs and the closure of hundreds of Patch community websites nationwide. The Wall Street Journal concluded that “the changes will radically curtail the scope of the nation’s most ambitious experiment in online local news.”

Armstrong said these “impacts” would be implemented over the course of this week. Since no actions have yet been announced, industry observers infer that today is the day that cuts will be announced.

Media reports indicate that AOL spent over $300 million attempting to make Patch profitable.  Investors have complained about the drag on AOL’s overall profitability caused by Patch’s continuing losses.

The possible shutdowns of local Patch websites comes close on the heels of another local media failure, the closure by the Los Angeles Times of the Pasadena Sun newspaper on June 29.