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RealTime IT News

AOL May Cut Up to 700 Jobs

Fresh off the finalization of its acquisition of Netscape Communications Corp., America Online Inc. reportedly plans to cut up to 30 percent of the browser pioneer's work force.

The report first appeared Friday in TheStreet.com which said AOL could trim 700 of Netscape's 2,500 employees as early as next week. The story cited unnamed company sources.

The AOL-Netscape buyout was original valued at $4.2 billion. However, AOL's skyrocketing stock has increased the deal to $9 billion.

America Online (AOL) spokesman Jim Whitney declined to confirm the report. The company said more information will be released next week on how AOL plans to integrate Netscape. A Netscape spokesman also refused to discuss the possibility of layoffs.

Some possible areas that could see cuts include public relations and marketing. Additional affected workers may be in divisions that make software similar to Sun Microsystems Inc.

In a separate agreement announced the same day of AOL's acquisition of Netscape, Sun agreed to pay AOL $350 million over the next three years in licensing, marketing and advertising fees, as well as major minimum revenue commitments.

The companies' marketing venture includes co-developing enterprise e-commerce applications and incorporating Sun's Java technology in creating next-generation Internet devices. In addition, Sun and AOL will expand their respective sales channels, integrating each other's products and services.

Sun will become a lead systems and service provider to AOL and AOL has committed to purchase $500 million in systems and services from Sun through 2002 for itself and its e-commerce partners.