America Online (AOL) cut 300 jobs Wednesday as part of the Internet giant's reorganization under new chief Jon Miller, a company spokesman confirmed.
Half of the cuts were in the company's Northern Virginia offices, with 60 in California and the remaining in other AOL facilities, the spokesman said. Although the job cuts represent just 1.5 percent of AOL's 18,000-person workforce, they mark the beginning of what is expected to be a series of planned layoffs aimed at restructuring the Internet giant as it implements a new strategy laid out by company executives last week.
Faced with slowed subscriber growth and plummeting ad revenue, the Internet service provider (ISP) is trying to shore up its business by focusing on broadband initiatives and exclusive content. Many of the jobs cuts Wednesday were technical posts, such as software developers and engineers, while other reductions were in administrative positions. Perhaps significantly, no job cuts were reported in AOL's broadband unit.
While laying out his plans to bolster AOL last week, Miller emphasized that cost reductions were in the works, especially given that the company forecast that ad revenue will fall nearly 50 percent next year as the market continues to falter.
Shares of AOL parent company AOL Time Warner Inc. (AOL) dipped 1.03 percent to US$13.51 Thursday morning.