AOL Time Warner is likely to lay off around 1,000 employees
from its online division this week, according to sources familiar with
the plans.
Although sources said Monday that the reduction is on schedule, they warned
that the announcement could be delayed. They said the cuts would affect
about 1,000 employees, clarifying previous estimates of "several
hundred."
America Online spokesman Jim Whitney declined to comment on the anticipated
layoffs. AOL employs 16,000 people.
The expected layoffs would mark the second round of cuts in the Internet
unit since America Online and Time Warner merged in January. Shortly after the deal
closed, the combined company slashed about 2,400 jobs. Divisions affected by
the cuts included America Online, CNN, Time Inc., Warner Bros. Online, Warner Music
Group and New Line Cinema.
AOL Time Warner executives have been publicly cost conscious and have
set aggressive financial goals for the end of the year. The company is
trying to reach $40 billion in revenue and $11 billion in earnings before
interest, taxation, depreciation and amortization (EBITDA).
However, the souring economy and the collapse of advertising dollars seem
to have affected the company's financial momentum. Last quarter, AOL Time
Warner's revenue fell short of
expectations, sparking concern on Wall Street that the company may have set
its sights too high.
AOL Time Warner executives in the past have exhibited confidence that their
multifaceted business would be less susceptible to a weakened economy.
Executives pointed out that should advertising revenues fall, the company
could fall back on its subscription businesses, including cable TV and the
America Online service.
But advertising covers 25 percent of the entire company's revenue, leading
Wall Street to question AOL Time Warner's immunity to the economic downturn.
"If there's overall weakness in online advertising, AOL may find a tougher
business climate as well," said Jordan Rohan, an equity analyst at Wit
SoundView. "Nobody is immune."
Join the conversation
Comment replyThe posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.
The company says that manufacturing facilities in Shenzhen and Chengdu, China, will be inspected by a group "dedicated to ending sweatshop conditions in factories worldwide."
A group calling itself Evil Shadow Team reportedly hacked into Microsoft's online store in India, stealing usernames and passwords of the site's customers.
The Samsung Galaxy Mini 2 S6500 could make its debut at the Mobile World Congress in Barcelona later this month, according to a leaked promotional image.
The space agency powers down its last System Z machine, years after IBM stopped selling them for the mathematical calculation jobs for which NASA originally bought them.
Join the conversation