AOL cuts 20% of workforce to save self

By Justin Mann on October 16, 2007, 1:44 PM
Around 2,000 people have suddenly found themselves without jobs as AOL has decided to engage in a very large layoff. For various reasons, including what seems to be some financial trouble, AOL has had to trim about 20% of their workforce. This is in a followup to an even larger workforce cut that happened last year.

Just how much trouble is AOL in? The statement from the current CEO of AOL does not inspire a lot of confidence as to the future of the company:

The last important piece in this transition is the realignment of our costs against these three businesses so we can operate as efficiently and effectively as possible. This is in many ways the most difficult step, but a necessary one.
Is AOL circling the drain? It is probably not that drastic just yet, but from a company that was based on a business model that is largely disappearing, it definitely shows that they are having difficulty keeping up with the rest of the world. While he did cite "growth" in AOL's new business model, which is essentially advertising, I certainly wasn't wowed:

We rebuilt and revitalized our key products, programming channels and platforms. And unique visitors to, News, Food, Money & Finance, TMZ, Moviefone, MapQuest and many other sites are up. Our products are once again creating buzz in the market.
If AOL is creating a buzz, I'm not hearing it.

User Comments: 2

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Rick said:
Once the grand, unifying spokemodel of everything wrong with technical support and service, its interesting to see 10 years later that it could be 'circling the drain'.Let's face it - AOL deserves to go under. It's always been the first to short-change and over-charge its customers and has been the last to change and improve with the times. AOL is a thorn in the side of technology and I, for one, will be glad to see them go.
mkatz2m said:
I always felt that AOL was for the typical non-technical dialup user who is phobic by nature with the internet. Those type of people are pretty much gone today since my phobic 85 year old mother-in-law has Verizon broadband at home and is sending email and just started buying things. She is much less phobic now and it took her close to a year to get this far and I find it interesting that she does not know what AOL is and has no need at all to ever hook up with that company. I never liked AOL even in the old days; I hated to use any one else's AOL dialup computer and had to work hard to get out of their bloated software to use the internet. I really don't see how they can survive as a viable stock investment company. They may survive to service the niche users needing not much but a little internet contact and/or cannot afford broadband.
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