AOL to lay off 700 staff

29 January 2009

As a result of heavy declines in digital ad spending, AOL plans to lay off approximately 700 staffers. The cuts will affect roughly 10 per cent of the Time Warner unit's global work force, and will be mostly complete by the end of March.

According to a memo circulated to employees the internet unit will also eliminate merit-pay increases this year to help minimise layoffs.

"Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars," said AOL Chief Executive Randy.

"As a result, we will be reviewing our entire organization to further align resources and expenses against the real revenue opportunities in this difficult market."

Many of the cuts will occur in units that don't directly support AOL's three core businesses: Platform A, its ad network unit; MediaGlow, consisting of AOL and other in-house sites; and People Networks, its social media cluster containing Bebo, AIM, Goowy and other properties.

AOL products that do not reside within those three core areas, and are therefore potential cost-cutting targets, include video search platform Truveo and MapQuest.