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RealTime IT News

AOL Plans Up To 1,000 Job Cuts

America Online Inc. Wednesday confirmed it will eliminate up to 1,000 jobs as a result of its recently-closed acquisition of Netscape Communications Corp.

AOL said it will trim between 350 and 500 positions at Netscape and will cut an equal number of jobs from AOL's other operations. AOL currently employs about 12,000.

Reports that AOL planned job cuts at Netscape first emerged last week. At that time, the company said it would meet with Netscape officials this week to discuss the integration of the two companies.

AOL said it would take an unspecified, one-time charge to pay for the job cuts in its fiscal third quarter.

The job represent the first widescale layoffs at Netscape. AOL did not detail which units will be affected by the layoffs.

Company Details Reorganization

AOL also announced it was organizing its operations into four product groups. The interactive services group, which will focus on its branded interactive services; the interactive properties group, built around brands that operate on multiple services or platforms; the Netscape enterprise group, which will serve Netscape's enterprise customers and contribute to an ongoing e-commerce alliance between AOL and Sun Microsystems Inc. and the AOL international group which will oversee AOL's overseas operations.

All of those groups will report to AOL President and Chief Operating Officer Bob Pittman.

The company said the new structure will help it advance its multiple-brand strategy and expand its lineup of products and services. AOL said the changes will also help extend the reach of Netscape's products and services, including its browsers and the Netcenter portal.

AOL Chairman and Chief Executive Officer Steve Case said the Netscape's acquisition will help the company advance its multiple brands and products and help it expand its e-commerce efforts.

"With the Netscape acquisition, we have dramatically improved America Online's ability to make the interactive medium more and more central to the lives of people around the world, especially enhancing our reach into the work place," he said.

Commitment to Open Source Reaffirmed

AOL confirmed it will continue developing Netscape's browsers and said version 5.0 of both Navigator and Communicator will be released later this year. AOL also reaffirmed its commitment to the ongoing efforts of Mozilla.org, Netscape's open-source organization.

New Management Team Named

AOL also named a new management team to lead its various units. Barry Schuler, previous chief of AOL Interactive Services, will lead the new Interactive Services Group. That group will oversee the AOL and CompuServe services and their related products. It will also oversee Netcenter and Netscape's browsers. The new group will also oversee broadband developments and non-computer devices, such as AOL-TV. Mayo Stuntz, former CompuServe president, will be the group's chief operating officer.

Jonathan Sacks, AOL's former senior vice president of programming operations, will become senior vice president and general manager of the AOL service. Audrey Weil, former CompuServe chief operating officer, was named the senior vice president and general manager of the CompuServe service. Both will report to Stuntz.

Mike Homer, who managed Netscape's Web division and Netcenter, was named senior vice president and general manager of Netcenter. He will continue to oversee Netcenter as well as browser development.

Lori Mirek, formerly Netscape's senior vice president of marketing, will becoming vice president and general manager of Netscape Business Solutions which will sell AOL and Netscape products and access to AOL business partners.

John Paul, former senior vice president and general manager of Netscape's server product division, was named senior vice president of AOL's products unit. Paul's unit will develop products for all AOL brands.

The company previously announced former Netscape chief Jim Barksdale was leaving his position, although Barksdale will become an AOL director. AOL also previously named Netscape co-founder Marc Andreessen as its new chief technology officer.

AOL shares (AOL) were down 5-3/4 to 115-1/4 in late-afternoon trading.