Deep Cuts at Patch, AOL’s Local News Sites

The cuts were an effort to reach profitability in a division that has failed to gain traction with consumers and has suffered huge losses financially. Patch’s troubles have been a source of frustration for AOL’s chief executive, Tim Armstrong, who helped found the service in 2007 when he was an executive at Google. Shortly after arriving at AOL in 2009, Mr. Armstrong had the company acquire Patch.

Patch’s idea is to provide an online network of local news sites, filling the gap in coverage left by newspapers that have either closed or greatly scaled back their investment in reporting in response to declines in advertising revenue.

The company said it had analyzed the performance of the approximately 900 Patch sites and identified about 60 percent as high-performing ones that should remain intact. AOL said it would look for partners to operate 20 percent of the sites that are considered viable, and it would close or consolidate the rest. At its current staffing, Patch has more than 1,000 employees.

“Patch’s strategy will be to focus resources against core sites and partner in sites that need additional resources,” AOL said in a statement. “Additionally, there are sites that we will be consolidating or closing.”

The statement added: “Patch has become an important brand across many towns in America. The Patch team across the country has served and will continue to serve communities with journalism and technology platforms. Unfortunately, with these changes we are announcing today, we will be reducing a substantial number of Patch positions.”

Some investors, skeptical that Patch can succeed, have urged AOL to dump the service altogether. The company has told analysts that it expects Patch to be profitable by the fourth quarter of this year.

Mr. Armstrong has said he is confident in Patch’s potential. The company says that the service has 3.5 million newsletter subscribers and 4.7 million registered users, increases of 138 percent and 181 percent in a year-over-year comparison. It says that between April and June, Patch had a 10 percent increase in traffic compared with the same period in 2012.

Patch’s troubles were the backdrop for an embarrassing episode for Mr. Armstrong last week. During a conference call with Patch employees, he became angry with an executive who was videotaping the proceedings and fired him on the spot, as employees listened. He apologized on Tuesday for the manner of the firing.

City Council Adds Funds to Patch Hole in DA's Budget

The Philadelphia District Attorney's Office saw a $450,000 hole in its budget patched in the spending plan passed by City Council on Thursday. But the funding may not be enough to keep in place two programs that divert defendants from the justice system.

EADS and BAE Systems Merger Talks Hit Rough Patch

PARIS — Britain, France and Germany failed on Friday to reach an agreement on the proposed $45 billion merger of the European aerospace groups EADS and BAE Systems, people close to the negotiations said.

But the three governments are expected to continue talking in the coming days, with an eye to resolving how to preserve their interests in the companies, as well as the balance of jobs and industrial expertise in their respective countries, if the merger plan proceeds.

A German government spokesman declined to comment late Friday on German media reports that the negotiations were on the verge of collapse. But British and French officials, speaking on condition of anonymity, dismissed the reports as speculation.

The companies said the talks had stalled but denied that the merger plan was dead. “In no way have we been told that the deal is off,” EADS, the European Aeronautic Defense and Space Company, said in a statement.

Talks among the three countries intensified this week ahead of a Wednesday deadline imposed by British market regulators for the two companies to announce a final agreement or seek an extension to continue negotiations. But the governments remain divided over the best way to balance state interests in the merged company, either through direct ownership of shares or through the granting of special voting rights to the governments, said the people close to the negotiations, who spoke on condition of anonymity because the talks were continuing.

France is standing firm on its insistence that it retain a direct stake in the merged group of no more than 9 percent, reflecting the value of its existing 15 percent stake in EADS, these people said.

Germany, which holds no shares in EADS, has proposed acquiring a 9 percent stake to balance the French holding. Currently, German interests in EADS are represented by the automaker Daimler and a consortium of private and public banks.

Britain, which owns no shares in BAE but can veto any merger, has accepted that the French cannot be forced to sell their stake. But London is worried that a German investment would put too much of the company in government hands and limit its ability to secure contracts in the United States, the world’s largest military equipment market.

“The critical issue is what the government ownership will be,” a person with direct knowledge of the talks said. “The only reason not to do a deal would be around government ownership.”

The deal proposed by EADS and BAE offers Britain, France and Germany each a so-called golden share, with a veto over hostile takeovers or deals involving sensitive national security assets.

But Thomas O. Enders, chief executive of EADS, and his counterpart at BAE, Ian King, have stressed that ownership of ordinary shares would not grant the governments any additional influence in the management of a merged company.

Melissa Eddy contributed reporting from Berlin, and Mark Scott from London.

This article has been revised to reflect the following correction:

Correction: October 5, 2012

Because of an editing error, an earlier version of this article misstated the position of the EADS and BAE chiefs on the prospective effect of share ownership by governments in a merged company. They said ownership of ordinary shares would not grant any additional influence; they were not referring to so-called golden shares with a veto over some deals.