AOL Will Cut 2,000 Jobs Worldwide / About 750 Jobs Are in N.Va.; Firm is Shifting Attention to Online Ads

AOL is eliminating an additional 2,000 jobs worldwide to cut costs and build its strength as it transforms from an Internet access provider to an online advertising company.

The cuts affect about 1,200 positions in the United States, including 750 in Northern Virginia, where AOL has long had its headquarters.

Workers at AOL’s Dulles, Va., campus had speculated for weeks that big layoffs were coming. Speculation intensified last week, when workers reported seeing large pallets of empty cardboard shipping boxes arrive at an AOL warehouse, presumably for laid-off workers to empty their desks.

None of the reductions is directly related to AOL’s announcement last month that it was moving its headquarters to New York sometime next spring to be closer to the media advertising industry. Most of those employees already work in New York. Senior executives such as AOL Chief Executive Randy Falco, meanwhile, are expected to keep offices at both locations.

The 20 percent slice from AOL’s work force comes after several rounds of layoffs in recent years, including a cut of 5,000 jobs last fall.

“This realignment will allow us to increase investment in high- growth areas of the company – as an example, we added hundreds of people this year through acquisitions – while scaling back in areas with less growth potential or those that aren’t core to our business,” Falco told employees yesterday.

AOL, once the leading seller of Internet access subscriptions, has struggled in recent years as Internet users have ditched their AOL accounts for high-speed services offered by cable and telephone companies.

To make up for declines in subscription revenues, the company has been trying to boost traffic to its ad-supported Web sites and last year began giving away AOL.com e-mail accounts, software and other features once reserved for paying subscribers.

Last year’s job reductions were mostly in customer-service and marketing personnel as AOL opted to stop producing and distributing its notorious trial discs aimed at luring new subscribers.

The latest cuts, by contrast, are expected to affect employees across the board.

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Originally published by The Associated Press.

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