AOL to cut more than one-third of workforce

Looking to cut annual operating costs by $300 million

NEW YORK -- AOL is looking to cut more than one-third of its overall workforce, and chairman and CEO Tim Armstrong is foregoing his 2009 bonus, the online company told employees Thursday.

It will look for up to 2,500 employees to voluntarily leave and accept severance packages early next month, the company said. The company currently employs about 6,900, according to a spokeswoman.

The staff reductions would come around the time of AOL's planned spin-off from Time Warner next month. It will need involuntary layoffs if it does not reach the target numbers through the voluntary option.

AOL is looking to cut annual its operating costs by $300 million.

Armstrong explained the moves in an email to AOL staff on Thursday. Explaining the decision to surrender his bonus, he said: "As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus. That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."