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AOL will pare third of its workforce

Time Warner has said it will spin AOL off as a separate company on Dec. 9. The companies merged in 2001. Time Warner has said it will spin AOL off as a separate company on Dec. 9. The companies merged in 2001. (Shannon Stapleton/Reuters)
Associated Press / November 20, 2009

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SAN FRANCISCO - The struggling Internet company AOL plans to shed up to 2,500 jobs - more than a third of its workforce - as it prepares to separate from Time Warner and sever their ill-fated marriage.

Major job cuts seemed certain after Time Warner said last week that AOL would take $200 million in charges for severance and other restructuring-related costs. But the magnitude was not known until yesterday.

AOL, which has already pared thousands of workers in recent years and now employs about 6,900, is asking for volunteers to accept buyouts.

The cuts will leave AOL at less than a quarter the size it was at its peak in 2004, when it had more than 20,000 employees.

The reductions show the company is endeavoring to become lean as it leaves Time Warner’s side in three weeks, but it is still unclear how they will help the Internet company, which has been trying to reinvent itself as a content and advertising company amid an ongoing decline in its dial-up Internet access business.

AOL’s operations still make money overall, but that profit has been falling. Nonetheless, AOL does have a few bright spots, including tech blog Engadget and celebrity website TMZ.com.