AOL to axe 2,300 jobs prior to spin off from Time Warner
20 Nov 2009
America Online (AOL) will cut its workforce by a third over the next several months even as the internet company is being spun off from Time Warner.
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 from the current workforce strength of 6,900 companywide.
The company will begin a voluntary layoff programme from 4 December and ask volunteers to accept buyouts. If the layoff programme falls short of the 2,500 target, the company will then start issuing pink slips to reach a payroll cut target of up to 2,300 positions, it added.
"We believe the voluntary programme gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs," AOL said.
People in executive posts are being offered more attractive incentives to leave than others. Senior vice presidents are being offered 9 months of severance pay, vice presidents will be offered 6 months of pay, directors will be offered 4 months pay and employees below director level who take the buyout would get 3 months of severance pay.
With the new round of restructuring, AOL plans to reduce its annual operating costs by about $300 million and will take $200 million in restructuring charges after its spinoff through the first half of 2010.