AOL to Cut 2,000 Jobs
20% of Global Work Force Getting Pink Slips as AOL Transitions to Advertising-Focused Operation
By Jon Hemingway -- Broadcasting & Cable, 10/15/2007 3:06:00 PM
AOL is cutting 20% of its worldwide work force, the company said Monday.
As part of its ongoing transition to an advertising-focused operation, the company is reducing its work force by 2,000 out of a total of 10,000 employees. The reduction will begin Tuesday and most of the U.S. notifications will be completed by the end of the day, according to Anne Bentley, a spokeswoman for AOL.
Out of the total, 1,200 of the eliminated jobs will be in the United States, with 750 occurring in northern Virginia, including the Dulles headquarters. The international reductions will be completed before the end of the year, Bentley said.
The job cuts will be “across the board” with no one occupational area being targeted. The latest round of job cuts follows a layoff of 5,000 employees, or 26% of AOL’s work force, in December.
AOL is undergoing a shift in its business focus. Traditionally a subscription-based Internet-access provider, the company is now focusing on an advertising-supported Web model. The company has aggressively acquired internet marketing assets, spending $500 million over the past year on acquisitions, and last month consolidated them under the moniker Platform A.
Some investors have been very vocal of their preference to see AOL spun off from its parent, Time Warner, as revenue growth has contracted.
Time Warner CEO Dick Parsons has publicly said that the company is concentrating on operations at AOL and not structural changes given the challenges involved in the transition the division is undergoing.
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