Print 29 comment(s) - last by tcsenter.. on Oct 18 at 2:50 AM

AOL is making some cuts to its workforce

America Online (AOL) is one of the oldest internet providers and once enjoyed widespread market dominance during the early 14.4k - 56k internet days.  The company, however, has aged less than gracefully and has struggled to keep up with modern technologies and internet trends. 

Part of what had brought it success made it become the bunt of many jokes -- its viral marketing, which included distributing free copies of its software at stores and in magazines. The software originally was made available on floppy disks and later on CDs, which frequently have been used as saucers by enterprising college students.

Now to cope with its struggles AOL is looking to trim some fat by cutting 20 percent of its workforce -- a cut of about 2,000 employees total.  U.S. employees account for 1,200 of the employees losing their jobs, or about 60 percent of the cut.  At AOL's Dulles, Virginia headquarters 750 employees are being cut.

AOL CEO Randy Falco sent its employees a "layoff letter" explaining the cuts to them, and how when he came to AOL he felt forced to make some significant changes in order to save the company.  Pink slips will begin arriving today, and will continue for several months.

"Everyone impacted by this reduction deserves our thanks and respect for their contributions to the company,” said Falco. “We will aid these individuals in their transition to new opportunities as much as possible, most importantly with what we believe are generous severance packages."

AOL's cut is not its largest in recent history -- it had previously cut 5,000 employees last fall representing a 30 percent reduction in its workforce.

Falco counters in the letter that AOL has also added "many" employees, though he does not mention how many.  He also points to AOL's acquisitions of AdTech, Third Screen Media and TACODA as signs of a turnaround.

Though not mentioned in the letter, ABC recently agreed to air its television content live on AOL Videos, as reported by DailyTech. AOL is looking to make the difficult transition from a company whose primary revenue was as a service provider to a company with mainly advertisement driven revenue.

"To where is this taking AOL? Put simply, 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 continued. “We’re only a year and a month into our transformation, and the turnaround has been dramatic. We're now in a position to win as an advertising-supported business."

However, many analysts believe that Time Warner, the owner of troubled AOL, will pull the plug and put the company up for sale soon if the outlook does not dramatically improve.

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It's too bad
By Quiksel on 10/16/2007 9:55:18 AM , Rating: 4
I was just about to complete a full bedroom suite created solely of those AOL CD's. Dang, guess I won't have enough to finish the armoire now.

Maybe I'll have to go back to my stash of AOL floppy disks to do the job. Hmmm.


RE: It's too bad
RE: It's too bad
By FITCamaro on 10/16/2007 10:18:34 AM , Rating: 2

This deserves a 6.

RE: It's too bad
By Polynikes on 10/16/2007 12:46:18 PM , Rating: 2
Haha, that's rich.

RE: It's too bad
By helios220 on 10/16/2007 1:20:23 PM , Rating: 5
25. Practice throwing stars for young ninjas.

Yeah... don't do that actually. Back in the day me and some friends got a few hundred AOL cd's and had a disc throwing battle royale... where we discovered that high speed cd's + face = blood loss + stitches.

Who would have guessed? hah

Not surprising
By FITCamaro on 10/16/2007 9:46:55 AM , Rating: 4
When your company sucks and is just bleeding customers, you tend to do badly. Horrible service and horrible customer service do not equal a money making strategy.

About the only decent thing AOL has is AIM. And even that has grown so huge, I might stop using it. I know there's other compatible software out there, I've just been too lazy to make the switch. At least they finally put IM logging in it.

RE: Not surprising
By Screwballl on 10/16/2007 9:58:22 AM , Rating: 2
horrible customer service, horrible dialup service, seriously buggy software, "if you stay with us instead of canceling we will give you 3 months free", and worst of all; continued billing after you have successfully canceled.

It is any wonder that anyone STILL uses it at all.

RE: Not surprising
By darkpaw on 10/16/2007 10:29:57 AM , Rating: 2
Their service on the infrastructure side is absolutely horrible too. Last year a non-profit I was doing volunteer work for got blacklisted by AOLs email servers for spamming. They were just sending out notices to their volunteers (many of whom had AOL accounts).

It was almost impossible to understand AOLs support people, better yet actually accomplish something. I spent a lot of time working on that issue and never did get it resolved, one of the other volunteers just started using their home account to send out the notices to aol members and suggested that people sign up for a yahoo or gmail account instead.

I don't think in 15 years I've worked in computers professionally, I've ever been more agrivated working with a company before.

RE: Not surprising
By retrospooty on 10/16/2007 11:30:48 AM , Rating: 5
Catch phrase of the '90's - AOL sucks
Lesser know catch phrase of the 2k's - AOL still sucks

At least they are consistent.

RE: Not surprising
By RandallMoore on 10/16/2007 11:47:25 AM , Rating: 2
gAyOL and AOhell were used a lot too. :)

RE: Not surprising
By formulav8 on 10/16/2007 1:32:01 PM , Rating: 2
AOHell... The first AOL proggy, how I miss those days. Apathy Punter was another great proggy... :)


so long....
By Moishe on 10/16/2007 9:58:24 AM , Rating: 2
AOL is the one internet provider that hasn't significantly changed or adapted and they're losing their shirt for it. It's no surprise and good riddance. The only reason they lasted this long is because they were so huge.

RE: so long....
By DEVGRU on 10/16/2007 10:49:29 AM , Rating: 2
AOL = Army Of Losers.

Just file chapter 11 and get it over with already...

RE: so long....
By mmcdonalataocdotgov on 10/16/2007 12:31:53 PM , Rating: 2
I didn't even know they were still around? Are there really that many noobs out there who still think AOL is the internet?

RE: so long....
By rudy on 10/17/2007 12:40:31 AM , Rating: 2
Yes in fact thats what it is, people who are not tech savvy were always the target customer of AOL and they thought they had a good business model, no infrastructure and make things easy and different so when people want to leave you they find using alternative browsers and programs difficult to learn.

The problem AOL did not figure out cause they are stupid is that over time people were going to learn to use computers or at least know a kid who could and eventually ISPs would be really just ISPs like cable and DSL and people would find it easier to learn 1 program say IE or FF and use that on any ISP and any computer. Unlike AOL which is really a software platform and isp and they have to charge you extra ontop of your broad band service.

I think the thing here is AOL should just give up they should completely get rid of their entire ISP business and focus on just generating profit from ads off of AIM the only product they have that is still popular though it should not be and will probably begin to twindle in market share as well.

20% = IT Department
By InternetGeek on 10/16/2007 10:06:07 AM , Rating: 3
So basically they are letting go the guys who actually work on the internet and leaving the 80% who send out CDs. Wise move.

RE: 20% = IT Department
By Gul Westfale on 10/16/2007 10:41:49 AM , Rating: 2
well what exactly do they do besides sending out their worthless CDs?

RE: 20% = IT Department
By FITCamaro on 10/16/2007 12:57:04 PM , Rating: 2
Develop the software on said worthless CDs.

By Murst on 10/16/2007 11:20:10 AM , Rating: 3
Although most people only see AOL by comparing it to current offerings (a comparison at which AOL fails miserably), there used to be a good part to AOL.

I remember in the early 90s, AOL was pretty much the best thing you could get. The only other big competitor was compuserve, and if you think AOL is bad, you should have seen compuserve back then.

Yeah, it used to be crazy expensive (I remember getting 5 hours per month with the $25 package, and every additional hour was something like $3), but back then there wasn't much choice. Thankfully other plans came out a few years later and we could get 100 hours per month from a local provider, and eventually changed to unlimited and then broadband.

Its about time that AOL started folding. They're been behind their competition for over 10 years now. But I'll also remember them as the ISP who brought the internet to the masses in the US.

About the only thing I still use that's AOL-related is the AIM network, but I don't even use AOL's software to connect. Trillian seems much cleaner for the job.

RE: Weird
By Tim Thorpe on 10/16/2007 12:33:33 PM , Rating: 2
This is what happens to service companies that don't invest in infustructure to remain in the game...if AOL had used those mad crazy profits from the 90's and internet bubble to increase capacity, upgrade their network and re-engineer their software it might have been a different game.

ahhh who the hell am I kidding, they'd still suck...

RE: Weird
By euclidean on 10/16/2007 12:44:39 PM , Rating: 2
That's almost exactly what I was thinking. Good sum up. What was it...AOL 7, 8, and 9, or somewhere in that range is when they started to suck really bad. They could overhaul and offer better packages...the biggest issues I saw with them in the near past was the software...if they just got rid of that then maybe they could pick it back up again. But it wont happen unless they do, because no one wants to have their PC completely reinstalled after just setting up AOL because something in their software decided to corrupt everything...

By mmntech on 10/16/2007 1:13:13 PM , Rating: 3
I didn't even know AOL had a workforce, let alone in the US. I Gave AOHell the boot ten years ago and never looked back.

RE: Shocked!
By hr824 on 10/16/2007 4:49:09 PM , Rating: 3
Same here there was a 3 week peoiod were I could not log on because the lines were allways busy. When I called them to complain I was told to log in later. I explained that I have a job and the need for sleep out weighted my need for AOl so cancel my account. 4 months later and 4 phone calls later the finaly did cancel it.

Reminds me of fighting with comcast when they got rid of road runner and my download speeds went from 500K to 125k and raised the price $5.oo a month. One of the happest days of my life was when what is now "wide open west" came on line and I got to cancel my comcast service.:)

Still use their floppies...
By grath on 10/16/2007 3:16:56 PM , Rating: 3
At a trade show in the early nineties the AOL rep had boxes and boxes full of floppies and couldnt give them away if her life depended on it, so I asked for a handful and she gave me a full unopened box of 500 of them. I never had to buy another floppy again.

RE: Still use their floppies...
By Mgz on 10/16/2007 5:22:35 PM , Rating: 2
AOL and VIA is going "Creative" :/

expect anandtech would write an article about AOL and VIA too

Viral marketing
By ZoZo on 10/16/2007 1:01:10 PM , Rating: 2
its viral marketing, which included distributing free copies of its software at stores and in magazines

That's not viral marketing, it's aggressive marketing. Viral marketing usually isn't aggressive.

*AOL MAIL Voice*
By v1001 on 10/16/2007 7:22:49 PM , Rating: 2
"You got fired"

By tcsenter on 10/18/2007 2:50:20 AM , Rating: 2
"To where is this taking AOL? Put simply, 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 continued.
So basically the new business plan is...errr...just like the old business plan?

Has AOL ever been anything but an advertising network with an ISP front-end? $25/month and you were still bombarded with advertising banners. Changing the marketing plans only stopped 'external' advertising via email, telephone, or pop-ups. They got those banner ads in everywhere no matter what.

That was my major complaint with AOL, other than the period of about two~three years where its network was terribly slow and unreliable due to over-subscribing its infrastructure. There was something offensive about paying a significant monthly fee (the industry's highest) for a service that bombarded you with the same amount of advertising as the "free" access/use model.

I still cannot believe a freaking dial-up company acquired a cable/media giant. Dial-up! Time Warner shareholders lost their shirts in that debacle, while AOL shareholders made-out like bandits.

Ahh...the irrational exuberance of the 90's faith-based economic 'boom'.

American Hispanics Online = AHOL
By sapiens74 on 10/16/2007 7:18:32 PM , Rating: 1
What would you like to do with your AHOL today?

I thought it might have caught on.......

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser
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