Into Thinned Staff: Armstrong Talks AOL 'Project Everest'

At day two of the Dow Jones and Nielsen-sponsored Media and Money conference, AOL CEO Tim Armstrong talked a little bit about the company's massive restructuring, an undertaking dubbed "Project Everest."

For AOL followers with long memories, the name of might inadvertently—and problematically—evoke the ill-fated Mt. Everest expedition undertaken by, among others, the ex-wife of former AOL COO Bob Pittman in 1996. That climb, recounted in Jon Krakauer's book Into Thin Air, resulted in the deaths of fifteen people. But, you know, that's probably not what AOL wanted its employees to think of when it named its restructuring and layoffs after the nearly insurmountable Nepali peak.

"Really, what the project is geared on is re-engineering the company," Armstrong told Mediaweek's Mike Shields from at the Roosevelt Hotel. "AOL, first of all, has a long history of cost-cutting at AOL and layoffs. And that's not how we started this process. We started this process [asking] 'What's our strategy? Let's get clear on it.'"

That question was apparently opened to the employees. This past summer, Armstrong and his team—as well as consultants from outside—sifted through recommendations for how to re-engineer AOL made by the employees themslves. (Those that remained, anyway: Before Armstrong came over to AOL from Google, the company cut 10 percent of its staff.) That re-structuring may cost up to $200 million, a figure first unearthed by All Things Digital's Media Memo blogger Peter Kafka who obtained the company's S.E.C. filing on the matter. The company announced 100 layoffs this week with more to come soon.

"I don't have the final number on my desk of what we're gonna do or when we're gonna do it as far as cost-structure changes, we were just trying to alert investors we were working on this project," Armstrong told Shields. "We're going through this process now. In the coming weeks and months—I think no more than probably two months—I think we will have a lot of information about how we'll reshape the company."

It wasn't all talk of layoffs. Later in the conversation, Armstrong addressed AOL's plans for local Websites, especially Patch, the company founded he founded and sold to AOL in June. Armstrong described Patch's content as complimentary to local newspapers and cited examples like Patch partnering with the New Jersey Star-Ledger.

He also said Patch was looking for local talent.

"We're hiring reporters," Armstrong said. "Can you imagine that?"

"That's unbelievable," Shields said with mock amazement.

"Let's talk afterward," Armstrong told Shields to audible snickers from the crowd.