AOL laying off 10% of staff
Time Warner business cuts 700 employees
More Articles:
Most Viewed:
Invictus(5681 views)Football player elbows vampires on Turkey day(3888 views)The Lovely Bones(1256 views)'Burn Notice' gets renewal(865 views)The costs of H’w’d spending(751 views)'2012' breaks B.O. record in Russia(702 views) |
The chief reasons for the cuts are a steep downturn in ad revenue -- pegged by chief Randy Falco in the “hundreds of millions” -- and the cost of restructuring the company to increase its competitive edge.
The layoffs, which will take place over the next several quarters, will also be accompanied by a merit-raise freeze. Cuts to domestic employees, who comprise the vast majority of the company’s global workforce, are projected to conclude by the end of March.
In a memo to the troops, Falco noted AOL is two years into a three-year recovery plan. Ticking off acquisitions and strategic moves, such as the ongoing split of the subscription-based access business from the ad-driven content business, he added, “This progress continues to put AOL in a strong position to capitalize on our new business model when the recession ends.”
Still, in the near-decade since the disastrous merger with Time Warner, AOL has continued to underachieve relative to its corporate siblings. While its traffic has grown and overall offerings have become more sophisticated than in the old “America on Hold” dial-up days, top execs at Time Warner still find the unit troublesome -- hence the recent buyout discussions with Yahoo.
A deal would seem attractive to certain buyers given an improved economic picture. Once powerful enough to be the acquiring company in the old media-new media megadeal with Time Warner, AOL has now shrunk to a valuation of about $5.5 billion.
Time Warner shares gained nearly 2% to close at $10.02 -- their first finish above the $10 level since Jan. 9.
