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Time Warner’s AOL unit announced about 2,000 layoffs Monday, or 20% of its worldwide workforce of 10,000.
In an e-mail memo obtained by The Hollywood Reporter, AOL CEO Randy Falco said the changes are a result of the online giant’s successful move during the past year from a subscription-based Internet service provider business model to an advertising focus.
“The last important piece in this transition is the realignment of our costs … so we can operate as efficiently and effectively as possible,” he said in his memo, also signaling that the cost savings will be reinvested in growth areas.
The job reductions will start today, when 1,200 U.S. employees — including 750 in Northern Virginia — will be notified, and rolled out during the next couple of months. The layoffs come throughout the world and across job functions, including in AOL’s Internet-access business.
A source said management wants the company to be structured as efficiently as possible now that its advertising focus is firmly in place.
In his memo, Falco lauded AOL’s transformation and turnaround during the past year as “dramatic.” Added the CEO, “My vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.”
Falco noted recent acquisitions of online ad firms and a rebuilt content offer, including TMZ, Moviefone and many other sites as key. “Our products are once again creating buzz in the market,” he said.
Falco also said that global expansion is another key focus, with AOL going into seven new countries this year to boost its presence to a total of 30 countries.
A source said the minimum severance for AOL staff affected by the layoffs is four months of pay.
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