AOL To Cut More Than One Third Of Its Workforce
Posted on: Thursday, 19 November 2009, 14:10 CST
With plans in place to spin off from Time Warner next month, AOL has announced that it may cut its workforce by more than a third.
On Thursday, AOL offered buyouts to 2,500 employees of its 6,000-employee workforce. The company said it would begin layoffs if it did not get enough volunteers for the buyout plan.
The job cuts are intended to cut annual operating costs by nearly $300 million. The voluntary layoff program will cost up to $200 million. AOL said those charges would be incurred from the date of the spin-off from Time Warner through the first half of 2010.
Time Warner reported this week that the spin off would occur on December 9, just nine years after its merger with AOL, when the company was valued at $163 billion.
AOL Chief Executive Tim Armstrong informed employees of the coming layoffs via video and email, adding that he would forgo his own bonus in 2009.
Additionally, AOL announced 100 job cuts last week.
The Web company has struggled in the modern era of the Internet, and is now more focused on support gained from advertising.
Time Warner’s shares dropped $1.12, or 3.4 percent, to $31.70 in midday trading Thursday.
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Source: RedOrbit Staff & Wire Reports
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