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RealTime IT News

AOL Time Warner Cuts 2,000 Jobs

The ax finally swung at AOL Time Warner Inc. Tuesday and the result was all too virtual with the newly merged media giant cutting 2,000 employees from it payroll, including 300 in Northern Virginia. Last week, the company began announcing layoffs across a number of its divisions, but it did not extend the cuts to Dulles, Va.

The layoffs in Northern Virginia, which, in most cases, are effective immediately, represent 7 percent of AOL's 4,000 employees in Virginia. No operations are being moved out of Virginia. Overall, AOL Time Warner is slashing 3 percent of its 85,000 employees.

As expected, most of the Virginia layoffs result from overlapping functions between the two companies. Although AOL declined to name specific numbers, the cuts include corporate and administrative positions in addition to layoffs at CompuServe, Netscape and portal operations. The layoffs also include "dozens of jobs" at Time's direct marketing division in Alexandria, Va.

"Nearly all" of the effected employees will receive a minimum of four weeks pay and stock options as part of their termination packages. The options, dubbed "founders grants," allow the former employees to buy stock in AOL Time Warner at a future date at set price. Terms of the options were not disclosed.

At the new corporate offices in New York, the company is lobbing approximately 100 overlapping positions, mostly in administrative and information technology jobs.

In addition to the job cuts in Alexandria, Time is also eliminating a number of positions by transferring its customer service operations in Birmingham, Ala., to Tampa, Fla. Another 100 jobs will be lost through the consolidation of some of Warner Brothers' Web sites, including the Los Angeles-based entertanment news and content provider Entertaindom.

Time Warner's New Line Cinema is eliminating 100 unspecified jobs in various divisions in New York and Los Angeles while the Warner Music Group plans to cut 600 jobs worldwide.

AOL Time Warner also plans to sell the 130 Warner Brothers retail stores.