Bloomberg News

AOL’s Armstrong Apologizes for Openly Firing Employee at Meeting

August 14, 2013

AOL Inc. (AOL:US) Chief Executive Officer Tim Armstrong, making a rare public apology, sent a memo to employees saying he was sorry for the way he fired a staff member at a meeting last week.

The CEO had fired Abel Lenz, a creative director for AOL’s Patch local-news business, in front of a room full of employees, as well as a thousand others who were listening in on a conference call on Aug. 9.

“I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz,” Armstrong said yesterday in the memo. “I am the CEO and leader of the organization, and I take that responsibility seriously.”

Armstrong called last week’s meeting to discuss cutbacks at Patch, which he aims to turn into a profitable business by the end of the year. The division -- a collection of local websites covering community news -- has been a costly part of his strategy to transform the dial-up provider into an advertising-driven content publisher. The company has spent more than $300 million to develop the sites.

Lenz’s ouster became public fodder after an audio recording of the meeting leaked out and appeared on the website of media blogger Jim Romenesko. Armstrong can be heard calmly discussing plans for the future of Patch until he notices Lenz documenting the meeting.

‘You’re Fired’

“Abel, put that camera down right now! Abel, you’re fired. Out!” Armstrong said. After a pause, he continued talking about Patch. Lenz hasn’t been rehired at the New York-based company.

Earlier in the week, Armstrong replaced Patch’s top executive, Steven Kalin, with Bud Rosenthal. As part of the cuts, he’s considering shutting or finding partners for 400 of Patch’s 900 community news sites, people familiar with the matter said. AOL is still calculating the number of eliminated jobs, which could number in the hundreds, the people said.

While the Patch division more than doubled its sales last year to just under $35 million, Patch’s annual costs range from $126 million to $162 million.

“As you know, I am a firm believer in open meetings, open Q&A and this level of transparency requires trust across AOL,” Armstrong said in the memo. “Internal meetings of a confidential nature should not be filmed or recorded so that our employees can feel free to discuss all topics openly. Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday, which drove my actions.”

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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