Bloomberg News 
 
 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 

 We have some new information that may explain why one of the most bizarre sequences in AOL history happened. 
 
 On Friday, AOL CEO Tim Armstrong fired Abel Lenz, the creative director of AOL's local news division Patch, during a conference call with about 1,000 coworkers on the line. 
 
 An audio recording of the conference call hit the Web late Saturday night. 
 
 It's pretty nuts. 
 
 The point of the call was for Armstrong to rally the employees of Patch — the day after Armstrong told Wall Street analysts he planned massive cost cuts for the division. 
 
 About two minutes into a speech addressed to everyone on the call, Armstrong pauses to address someone in the room. 
 
 He says, "Abel, put that camera down, now." 
 
 Then, without taking a breath, Armstrong says, "Abel, you're fired. Out." 
 
 If you haven't heard it yet, go listen right now. 
 
 One of the reasons the recording is so odd is that Armstrong hardly seems to give Lenz a chance to put down the camera before firing him. 
 
 Also: We're told that Lenz, based in New York, would always take pictures of big speakers during conference calls, and later post the images on Patch's internal Web site, so the 1,000 or so remote workers could see them. 
 
 He wasn't doing anything unusual at the time. 
 
 It all makes you wonder: Did Armstrong have something else against Lenz? 
 
 Was there another reason he was so quick to fire him? 
 
 Today, we learned some new information that suggests the answer to that question is "yes." 
 
 Apparently, after firing Lenz, Armstrong went on to "[crap] all over" Lenz's biggest project for the company, Patch 2.0. 
 
 Says a source: 
 
 The Patch 2.0 redesign was spearheaded by Abel Lenz, at least at the beginning. He was brought into Patch from another area of AOL in the first half of 2012 when it became clear that the existing Patch web and mobile design talent was not up to the task. As to whether Abel was still leading that team, I don't know. 
 
 But, according to people who were on the call, Armstrong called out Patch 2.0 as being awful (paraphrase, not a direct quote). … That's why I thought it was odd that, of all the people he called out and fired on the call, it was the guy who was responsible for building and launching Patch 2.0, an update that Armstrong clearly was not happy with. 
 
 Maybe Armstrong was so quick to fire Lenz over such a small offense because he was already planning on letting him go because he didn't like his work? 
 
 That would certainly make Armstrong's behavior easier to explain, if not excusable. 

 We reported yesterday that AOL’s hyper-local news service would lose hundreds of employees today, and now we have confirmation from a well-placed Patcher privy to the call that AOL CEO Tim Armstrong did indeed confirm to employees that hundreds would be laid off, with notifications of who will be let go coming throughout the coming week. (Disclosure: AOL owns TechCrunch). 
 
 In a call Armstrong held with the Patch team today, he explained that “AOL is going to be running the show” at the restructured Patch along with new CEO Bud Rosenthal. Rosenthal replaces outgoing CEO Steve Kalin, who was reported to be getting the boot earlier this week. 
 
 400 Patch sites will be closed or partnered with outside sites over the coming week as part of the changes being made at Patch to try and turn things around, Armstrong explained on the call, but also reassured the Patch staff that the company is behind the initiative and told them not to “worry about what [they] read in the press,” calling it “bullshit.” Nonetheless, he encouraged any Patch non-believers still remaining at the company to get out now, emphasizing that there’s no room for equivocation in turning the effort around. 
 
 In a somewhat dramatic twist, Armstrong reportedly fired an employee who took his photo (behavior he presumably didn’t approve of), while on the call with 1,000 people listening in. Our tipster said the public nature of the termination struck them as “shameful and disgusting” behavior. 
 
 Our source isn’t very convinced by the bluster around the new direction put forth by Armstrong. They suggest that this new strategy is really a “correction of a bad idea” that involved scaling far too fast without proper thought and planning, and notes that original Patch sites are still among the most successful. Focusing on those regions that actually do drive good revenue and traffic is probably the only way to save Patch at this point, however, so big cuts are probably unavoidable. 
 
 Armstrong put on a brave face and discussed tough choices on the call, but our source notes that the AOL CEO was also there throughout the network’s decline, and had approved the very same people that he “buried on the call today.” Overall, the source says there’s not much reason to be confident in Patch’s leadership anymore. 
 
 The stakes at Patch are high because AOL has promised it will see positive revenue by the end of the year, which is a tall order given its most recent earnings results. These cuts and shifts in strategy are drastic measures, but that’s exactly what’s required if Armstrong wants to make good on a promise of Patch profitability by year’s end. Ultimately, our source says the lesson to learn is that “news works,” and that a strategy that refocuses on those editors who cover their towns well and leaving them intact is probably Patch’s best chance at still existing in some form a year from now. 

 AOL chief executive Tim Armstrong fired Patch creative director Abel Lenz two minutes into Friday’s call with Patch employees. Lenz’s sin: Taking a picture of the CEO during his talk. (“No comment,” the fired Patcher wrote Friday from Old Town Bar.) 
 
 Here’s the transcript of the first minutes of the call, which I’m told went on for an hour and 40 minutes. You can listen to part of the call (2 minutes, 33 seconds) here. 
 
 Tim Armstrong: 
 
 There’s a couple of things I want you guys to realize and really think about and sink in, and if it doesn’t sink in and you don’t believe what I’m about to say, I’m going to ask you to leave Patch. And I don’t mean that in a harsh way; I mean that in the way of we have to get Patch into a place where it’s going to be successful and it’s going to be successful for a long time. There’s a whole bunch of towns that are going to be successful but we need the whole enterprise to be successful. 
 
 The first one is, I will take full credit and full responsibility for anything that’s not right at Patch. If the coffee machine doesn’t work, or a town doesn’t work — anything that’s going wrong at Patch you can blame me for it. I founded Patch, we brought it into AOL, we’ve been very busy turning around AOL overall. 
 
 I don’t care what the press says, I don’t care if people leak information. I’ve already lived through that at AOL — when I took over AOL — so if you need somebody to blame for why we’re making changes at Patch you can blame me. I take full responsibility. … 
 
 I also want to clear up the fact that leaking information or anything around Patch isn’t going to bother me, doesn’t bother me. I’m not changing direction. When you hear about what we’re doing at Patch it’s very serious and it’s very forward-thinking and anything that happens around Patch isn’t going to change that direction. 
 
 Third thing is if you don’t use Patch as a product and you’re not invested in Patch, you owe it to everybody else at Patch to leave. If you think what’s going on right now is a joke, and you want to joke around about it, you should pick your stuff up and leave Patch today, and the reason is, and I’m going to be very specific about this, is Patch from an experience — Abel, put that camera down right now! Abel, you’re fired. Out! [Momentary pause.] If you guys think that AOL has not been committed to Patch, and won’t stay committed to Patch, you’re wrong. The company has spent hundreds of millions of dollars, the board of directors is committed, I’m committed. …. 

 After a call with the AOL-owned Patch team included the public firing of Patch Creative Director Abel Lenz last week, AOL CEO Tim Armstrong has issued an internal memo apologizing for the action and providing some additional context (disclosure: AOL also owns TechCrunch). In the memo obtained from a tipster, Armstrong says that he has apologized to Lenz for the behaviour and that it was unfair to the former employee at a “human level.” 
 
 The entire memo follows: 
 
 AOLers – I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz. It was an emotional response at the start of a difficult discussion dealing with many people’s careers and livelihoods. I am the CEO and leader of the organization, and I take that responsibility seriously. We talk a lot about accountability and I am accountable for the way I handled the situation, and at a human level it was unfair to Abel. I’ve communicated to him directly and apologized for the way the matter was handled at the meeting. My action was driven by the desire to openly communicate with over a thousand Patch employees across the US. The meeting on Friday was the second all-hands we had run that week and people came to Friday’s meeting knowing we would be openly discussing some of the potential changes needed at Patch. As you know, I am a firm believer in open meetings, open Q&A, and this level of transparency requires trust across AOL. 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. We have been through many difficult situations in turning around AOL and I have done my best to make the best decisions in the long-term interest of the employees and the company. On Friday I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me. We have tough decisions and work to do on Patch, but we’re doing them thoughtfully and as openly as we can. At AOL, we had strong earnings last week and we’re adding one of the best companies in the world to the team. AOL is in a great position, and we’ll keep moving forward. – TA 
 
 It’s worth noting that at no point in the memo does Armstrong discuss Lenz’s current job state, so the firing likely sticks. Armstrong says the firing is a direct result of Lenz having exhibited this kind of behavior before, and being told explicitly not to, but other reports have suggested that he may have been on thin ice anyway after the Patch 2.0 redesign project failed to impress. 
 
 Patch is currently in a state of considerable upheaval, as employees wait to hear more about the “hundreds” of layoffs coming down the line. TechCrunch spoke to a local editor about the original conference call discussing the changes to come for Patch, and they expressed some skepticism about its ability to turn around, though he did suggest refocusing on the core Patch sites which have proven profitable covering specific areas could effect considerable positive change. 
 
 Patch was listed specifically as a significant factor negatively impacting the overall adjusted operating income of the overall AOL brand in its most recent quarterly earnings result, and AOL has promised to make Patch profitable by year’s end.
– AOL's local news network, Patch, is losing money, closing hundreds of websites, and laying off hundreds of employees, TechCrunch reports. But that is not its biggest problem right now. That honor goes to the dismissal of just one employee last week. In the middle of a meeting with Patch employees, thousands of whom were listening in via conference call, CEO Tim Armstrong abruptly fired the site's creative director Abel Lenz in about 10 words, then without skipping a beat, continued on with his talk. A recording of the meeting was posted on Romenesko (and subsequently spread like wildfire online), but here's the relevant part: ...I’m going to be very specific about this, is Patch from an experience — Abel, put that camera down right now! Abel, you’re fired. Out! [Momentary pause.] If you guys think that AOL has not been committed to Patch... Now Armstrong has had to apologize for the "mistake," which he called an "emotional response at the start of a difficult discussion." In a company memo, he took responsibility for "acting too quickly," but defended his decision: "Internal meetings of a confidential nature should not be filmed or recorded so that our employees can feel free to discuss all topics openly," he wrote, per Businessweek. "Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday, which drove my actions." According to Business Insider, Lenz typically took photos of speakers during meetings to post on the company's internal blog. As Tech Crunch notes, nowhere does the memo say the dismissal itself was wrong, so Lenz is probably still without a job.