Exclusive: AOL to Layoff 10 Percent of Staff, Cutting 700, Due to Ad Meltdown and Refocusing on New Structure
Time Warner online unit AOL will announce layoffs of 700 employees people sometime today, due to both the weak economy and a fall off in advertising revenue, but also recent structural changes made to focus the once-mighty service.
The 10 percent reduction in work force will take place over the next several quarters, with most of the U.S. layoffs to be completed by March. AOL has 7,000 employees worldwide, mostly located in the U.S.
AOL is also eliminating merit raises, just as Yahoo (YHOO) and other digital companies have done recently, and consolidating facilities.
While Time Warner (TWX) has been trying to sell AOL to Yahoo, the online unit has been shifting its resources, as part of a long-term turnaround plan. It has focused the company on three parts: its Platform-A ad unit; its communications and social networking arm People Networks; and its recent MediaGlow content studio,
: