As previously reported, most of employees laid off worked out of AOL's Dulles, Virginia, headquarters with most departments across the company affected. Tuesday's cuts come one year after AOL laid off about 500 employees, mostly from the company's California offices.
The layoffs come weeks after AOL announced its intention to realign the company to focus more of its resources on the free Web. While the company will continue selling subscriptions for dial-up access and a "bring your own access" product for broadband users, it has formed a new division that will focus on Web programming and content.
The move toward the free Web is an attempt by AOL to chase after the resurging dollars from online advertising. As companies such as Yahoo, Microsoft's MSN and Google continue to profit heavily off commercial search dollars and increasingly display advertising, AOL hopes to get a piece of the action.
The company has little choice but to turn to the Web since subscriber numbers continue to decline. Over the past two years, AOL has lost 4 million subscribers to 22.7 million as of September 30.
On the bright side, online advertising revenues have grown for the past three quarters, fueled largely by a revenue-sharing deal with Google's commercial search business. Earlier this week, parent company Time Warner's CEO Richard Parsons said AOL's online advertising would reach nearly US$1 billion in 2004, up 33 percent from last year.
Were any of the layoffs based on a changed market and any need to protect the reputation of the services? at the moment this is going on A lot and the implications of not making adjustments could render the company liable for huge legal proceedings. This is very serious because AIDS is out there now and could create an international disaster so if you need to survive try to keep the standard good. I think it would be very humiliating to die from this disease and I dont want it and will do all that I can not to get it! That is the attitude of most people now who take into account everything before they make commercial/personal decisions at the moment and dont we have the right to?LIVE? or die? Why cant I decide? If I need to bear the leprosy of sin NO thankyou mate!