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Archive for Friday, August 4, 2006

AOL to cut payroll by 5,000 workers

August 4, 2006

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— AOL will shed as much as a quarter of its global work force within six months as the company seeks more than $1 billion in savings to offset its decision to give more services away for free.

Some employees in Europe will still have jobs but with a different company as AOL looks to sell its Internet access businesses there. But in general, massive layoffs are expected as AOL stops actively marketing its dial-up services in the United States and reduces its need for customer-support centers.

AOL will no longer produce and distribute trial discs that often come unsolicited in mailboxes and magazines. Employees who do those jobs will likely get pink slips.

Nor will AOL get as many customer-service calls, because live support is available only to paying subscribers, many of whom will cancel and accept AOL's offer for free e-mail and software. AOL will likely shed jobs there, too.

All told, the Time Warner Inc. unit formerly known as America Online expects to drop as many as 5,000 employees from its payroll, out of a global work force of 19,000.

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