AOL will fire 33% of its employees

Discussion in 'Stocks' started by ByLoSellHi, Nov 19, 2009.


    AOL Plans to Cut One-Third of Employees, About 2,300 (Update1)
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    By Sarah Rabil

    Nov. 19 (Bloomberg) --
    AOL, the Internet unit being spun off from Time Warner Inc. in December, plans to cut about one- third of its workforce over the next several months.

    AOL employs about 6,900 people, AOL spokeswoman Tricia Primrose said in an e-mail, indicating job cuts of about 2,300. The company will begin a voluntary layoff program Dec. 4 and is looking for as many as 2,500 volunteers, she said. AOL will begin firing employees if the voluntary departures fall short.

    “They need to get leaner to enhance the stock,” Fred Moran, an analyst with Benchmark Co. in Boca Raton, Florida, said in a Bloomberg Radio interview. “They’ve had the opportunity to compete for the last decade and arguably they’ve failed.”

    AOL is aiming to reduce its annual operating costs by about $300 million through the restructuring, the New York-based company said today in a regulatory filing. AOL, an online pioneer, is now combating a slump in advertising revenue that contributed to a 50 percent drop in operating income at the division in the third quarter.

    Chief Executive Officer Tim Armstrong, 38, told employees in July that job cuts were possible. Armstrong, a former Google Inc. executive named CEO of AOL in March, plans to overhaul advertising and develop more local and niche Web sites to help turn around falling sales.

    AOL Spinoff

    Time Warner this week said the planned spinoff of AOL to shareholders will take place Dec. 9, and AOL will begin trading as a separate company on Dec. 10. The separation will undo the 2001 merger that led to record losses the next year.

    AOL expects to take as much as $200 million in restructuring charges in the first half of 2010 if the plan is approved by the new board after the spinoff, according to the filing.

    Armstrong told employees today that he will not take a bonus this year, Primrose said. He said it is not indicative of future payouts for the overall employee bonus plan.

    Armstrong’s three-year contract, ending in April 2012, provides a salary of $1 million a year and a cash bonus of as much as $4 million. His 2009 bonus was guaranteed to be at least $1.5 million.

    Time Warner fell 88 cents, or 2.7 percent, to $31.94 at 10:33 a.m. in New York Stock Exchange composite trading. The shares, which Benchmark’s Moran recommends holding, increased 47 percent this year before today.

    To contact the reporter on this story: Sarah Rabil in New York at
    Last Updated: November 19, 2009 10:34 EST
  2. More jobs lost more people feeling lost
  3. S2007S


    Why anyone uses AOL anymore is beyond me, the last time I used AOL or their services was 3 years ago, this company will be lucky to still be around in 5 years. Thousands more people being let go, cost cutting is the only survival for some of these companies during these tough times, and if has to be that they let go 2500 employees or 25,000 employees they will.
  4. What does AOL even do any more?
  5. the1


    Damn BLSH. I had to triple my dose of Prozac today after reading all the articles you posted :(
  6. I suppose they are just like Yahoo! now with messaging, email, and web content. ISP side of their business should be effectively dead.
  7. I like moviefone. I think they own it? I watch the DVD trailers there and then rent from Netflix of BB.

    But I get a chuckle when ppl. give me an e-mail with AOL on it.
  8. PPT


    AOL, 2009


  9. pma


    ..."and is looking for as many as 2,500 volunteers."
    LOL-what an effin joke! Maybe other corporations should look into this bright idea :)
  10. Lucrum


    Employee layoffs mostly.
    #10     Nov 23, 2009