AOL trims staff, retools strategy before board meeting

Beleaguered Internet giant America Online (AOL) cut 90 people from its Interactive Marketing division this week, a source close to the company said, in what is expected to be part of the company's new strategy to decrease emphasis on advertising and throw more weight behind e-commerce offerings.

The job cuts were made Tuesday, just two days before the Internet unit of AOL Time Warner Inc. (AOLTW) is expected to present its new business plan to the company's board, the source said.

AOL, saddled with a sluggish online advertising market and slowed subscriber growth, is in the process of restructuring under new AOL head Jon Miller. Miller, who was appointed in August, is expected to lay out his plans to AOLTW's board Thursday, and to analysts and press at a meeting scheduled for Dec. 3.

With the online advertising market continuing to falter, Miller is expected to shift AOL's business focus to reeling in revenues from e-commerce offerings such as games and auctions. Meanwhile, the company's Interactive Marketing department is slimming down, with around 550 employees now remaining.

Earlier this month, AOL Interactive Marketing President James de Castro stepped down after just 7 months at the post. His position was assumed by Robert Sherman, and earlier this week Lisa Brown, who hails from Miller's former employer USA Interactive Inc., was named as the department's new executive vice president.

All eyes will no doubt be on the recently reshuffled executive team as they present their new plan for AOL over the coming weeks.

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