AOL Inc, the struggling internet firm and now an independent company after its seperation from Time Warner in December, (See: AOL ends 10-year alliance with Time Warner) yesterday began cutting more than 1,000 jobs in the US and Europe after a voluntary departure programme to reduce a third of its staff 6,900 companywide workforce attracted only 1,100 employees.
AOL's operating profit declined by more than 40 per cent in the first nine months of 2009 due to a sharp fall in internet advertising but the company hopes to bounce back as companies begin to loosen their online advertising purse strings this year.
New York-based AOL, which has already laid off thousands of workers in recent years, said it would shed up to 2,500 more jobs to help reduce annual operating costs by about $300 million. (See: AOL to axe 2,300 jobs prior to spin off from Time Warner)
The company had earlier atempted a voluntary layoff programme from 4 December and asked volunteers to accept buyouts, saying if the layoff programme fell short of the 2,500 target, the company would then start issuing pink slips to cut 2,300 positions from its payroll.
As of yesterday, the voluntary departure programme attracted only 1,100 employees, who depending on their positions, received about three to nine months' pay and other benefits.
AOL had said in November that employees in executive posts were offered more attractive incentives to leave than others. Senior vice presidents were offered 9 months of severance pay, vice presidents and directors would be given six and four months of pay respectivelty, and employees below director level opting for the buyout would get three months of severance pay.