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.