TELECOM Digest OnLine - Sorted: AOL Lays Off 1300 Employees

AOL Lays Off 1300 Employees

Anick Jesdanun (
Tue, 9 May 2006 12:56:03 -0500

By ANICK JESDANUN, AP Internet Writer

AOL is laying off about 1,300 employees, or 7 percent of its worldwide
work force, and is closing its call center in Jacksonville, Fla.

Other cuts will come from call centers in Ogden, Utah, and Tucson,

The layoffs announced Tuesday represent the first major cuts since the
Time Warner Inc. Internet unit cut about 700 positions last fall.

Although AOL's subscription has been declining, spokesman Nicholas
Graham attributed the layoffs to more savvy customers and better tools
for them to help themselves.

"The Internet world of 2006 is very different from the world of 1996
when AOL first established these member centers," Graham said. "Today,
AOL members are more savvy and sophisticated online. They are very
different members today than they were in 1996."

In its early days, AOL had a reputation for attracting beginners,
leading some longtime users to deride the service as the "Internet on
training wheels."

But AOL dropped some of its hand-holding over the years and began
offering its subscribers computer-diagnosis, anti-spyware and other
free software, "allowing them to troubleshoot on their own," Graham

In addition, he said, AOL has been expanding its online help areas,
such that 8 million customers a month now look up information
themselves online, compared with 5.5 million who interact with a human
by phone, e-mail or online chat.

"They are able to accomplish with a couple of clicks what it used to
take them a phone call or two or three to accomplish," Graham said.

As a result, Graham said, call volume has dropped by about 50 percent
since 2004.

"That's a remarkable success in terms of customer care," he said. "It
requires us to rebalance our work force."

By contrast, U.S. subscribers dropped by about 22 percent in the past
two years. AOL had 18.6 million subscribers as of March 31, down from
a peak of 26.7 million in September 2002, as more Internet users drop
dial-up connections in favor of broadband.

AOL is closing its Jacksonville center Tuesday, laying off 780
employees there. It is laying off 300 in Tucson and 125 in Ogden, with
nominal reductions in other locations such as Albuquerque, N.M., and
Dulles, Va.

More than 500 will remain employed in Tucson and 400 in Ogden. The
Ogden reductions take effect Tuesday, and Tucson's are effective June

Shares in Time Warner rose 1 cents to $17.06 in morning trading
Tuesday on the New York Stock Exchange.

Copyright 2006 The Associated Press.

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