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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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...

"I modded down, down, down, and the flames went higher." -- Sven Olsen
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