Business Administration Education Guide

Monday, October 15, 2007

More AOL job loss

The AOL transition from online access provider to online advertising is making waves and the latest one has dumped 2,000 jobs. This is in addition to last year’s 5,000 employee lay offs where AOL said would work to boost traffic to its ad-supported Web sites by giving away AOL e-mail accounts, software and other features once reserved for paying subscribers.

Employees at AOL's Dulles, Va., location have been speaking in hushed tones for weeks that big layoffs were coming. Last week speculation intensified when employees reported seeing large pallets of empty cardboard shipping boxes arrive at an AOL warehouse.

AOL Chief Executive Randy Falco told employees

"This realignment will allow us to increase investment in high-growth areas of the company -- as an example, we added hundreds of people this year through acquisitions -- while scaling back in areas with less growth potential or those that aren't core to our business."

Last year's lay offs were mostly in customer-service and marketing as AOL opted to stop producing and distributing its infamous free trial discs. The latest cuts were expected to affect employees across the board. While more reduction in staff is expected by year's end, severance packages are to include at least four months' pay. In addition, AOL recently announced it was moving its headquarters to New York to be closer to the media advertising industry.

Last month, AOL announced that it was consolidating its advertising operations to share innovations across the company and help potential advertisers more easily buy ads across AOL properties and third-party sites that have become part of the AOL network through various acquisitions.

Shares in AOL LLC's parent company, Time Warner Inc., (Charts, Fortune 500) dropped 17 cents to $18.81 in Monday trading.


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