TELECOM Digest OnLine - Sorted: AOL Fires 700 Employees This Week

AOL Fires 700 Employees This Week

Kenneth Li (
Wed, 19 Oct 2005 21:47:56 -0500

By Kenneth Li

Time Warner Inc.'s AOL Internet division this week laid off more than
700 employees, or less than 5 percent of its global work force, amid
ongoing efforts to cut costs, the company said on Wednesday.

Most of the cuts came from AOL's dial-up service operations, AOL said.

AOL, which is currently being courted by Microsoft, Google Inc.,
Comcast Corp. and Yahoo for a possible investment and joint venture,
has shut down its Orlando, Florida, call center, and trimmed jobs in
other areas, including the division's corporate headquarters in
Dulles, Virginia.

"As a result of this structural and strategic transformation, AOL is
better positioned to remain flexible, nimble and competitive in the
market, enabling us to expand existing audiences and reach new ones
online," Nicholas Graham, an AOL spokesman said.

Once the object of scorn at corporate parent Time Warner Inc., AOL has
emerged as the center of attraction for a party of top Internet
companies seeking to cement their market position.

Over the past year, the company has sought to exploit the explosive
growth of online advertising by making more of its programming and
services freely available on the Internet.

It won high marks for its online broadcast of the Live 8 concerts for
aid to Africa, whose viewership handily beat cable and network
television broadcasts of the event.

The company hopes to counter a blistering loss of its traditional
dial-up modem subscribers. At the end of the second quarter the
company had 20.8 million U.S. subscribers after losing 2.6 million
since the beginning of the year and more than 6 million over the last
three years.

It declined to specify the cost savings that would be achieved with
the recent round of cuts, or the impact from severance. AOL
contributed about 20 percent of the company's 2004 revenue and profits
excluding items.

One source familiar with the actions said the charges would be booked
during Time Warner's fiscal fourth quarter.

Copyright 2005 Reuters Limited.

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