RealTime IT News

AOL Cuts 700 Jobs

Media conglomerate Time Warner's struggling Internet division America Online this week laid off more than 700 employees, the company said on Wednesday.

AOL, which has been exploring the possibility of joint ventures with several potential big name partners over the past year, shut down its Orlando, Fla., call center and cut jobs in several other areas around the country, including at its corporate headquarters in Dulles, Va.

The layoffs primarily affected the company's membership services division and represented approximately 4 percent of AOL's total workforce of 20,000.

"As a result of this structural and strategic transformation, AOL is better positioned to remain flexible, nimble and competitive in the market, enabling us to expand existing audiences and reach new ones online," Nicholas Graham, an AOL spokesman, told internetnews.com.

He also said the cuts were part of an ongoing effort to cut costs.

AOL has been looking to increase revenue through several avenues over the past year, including attempts to tap into the continued growth of online advertising.

In June, the company moved to an ad-supported model, hoping to snatch revenue from the growing online advertising market.

However, the company seemed to have stalled in selling its new free portal to the public, and had not followed with a significant marketing campaign.

Amid much speculation, numerous reports concerning merger talks surfaced over the summer.

Microsoft , which is said to have initiated a dialogue earlier this year, is reportedly interested in buying a big stake of the online business, possibly leaving the two companies equal partners in a venture that would make for the world's largest Internet company.

Search giant Google and cable giant Comcast had been reportedly negotiating to purchase a stake in AOL.