January 28, 2009
AOL Cuts 10% of Workforce
As reported in the BoomTown Blog, America Online announced today it will reduce its headcount by about 10% by the end of March. The layoffs will affect approximately 700 workers. The cuts, announced by CEO Randy Falco in a long company-wide memo, cross all divisions and platforms. A massive downturn in online advertising is cited as the reason AOL is cutting so severely. Over the past year, AOL's parent company, Time Warner, has been trying to offload the company to a third-party. AOL was seen as a potential purchase for Yahoo! in the spring and summer of 2008 while Yahoo! was working to fight off Microsoft's take-over offer. AOL is also working to shutter its Internet access business which provided the primary revenue foundation for the company over the course of its lifetime. AOL now focuses on three main business tracks, the Platform-A ad network, social networking tools such as AIM and the MediaGlow content studio. AOL will also be consolidating office space in the Valley, Southern California and in Dulles Texas. The company reported a loss of nearly 20% in ad revenues over last year. The firm is now valued at approximately $5.5billion.