AOL: We need to fire 2,500 'volunteers'

AOL, which has already told investors that it will spend up to $200 million firing a good chunk of its staff, has now told its employees. It is looking for "up to 2,500 volunteers," CEO Tim Armstrong told his staff Thursday. That's a third of the company's payroll.

The voluntary layoff program begins December 4, a few days before the company spins off from Time Warner. If AOL doesn't get enough volunteers, it will ax people on its own.

This is lousy news for employees, who are faced with a "jump now or wait to be pushed" decision, but it is designed to cheer investors: AOL says the cuts will drop its annual operating expenses by $300 million. Through the first nine months of this year, AOL's operating expenses ran around $1.8 billion.

Meanwhile, AOL is looking to shed some parts of its business altogether. It has hired bankers to sell off its ICQ messaging service and is considering dumping MapQuest, among other assets.

Armstrong's (expensive) goodwill gesture: He is giving up his 2009 bonus, which was to be at least $1.5 million. His explanation to employees: "As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forgo my 2009 bonus. That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."

Here's the text of the company's filing with the SEC:

On November 19, 2009, AOL Inc. (the "Company") informed its employees of proposed restructuring activities as part of its continuing cost reduction initiatives aimed at aligning the Company's organizational structure and costs with its strategy (the "Restructuring"). The Restructuring is conditioned upon the successful completion of the Company's previously announced spin-off from Time Warner Inc. (the "Spin-off"), as well as the approval of the Company's new Board of Directors that will begin service in connection with the Spin-off. It is anticipated that, if approved, the Restructuring will include the reduction of approximately a third of the Company's current employee base, which will be conducted on a voluntary and involuntary basis. The goal of the Restructuring is to reduce ongoing annual operating costs by approximately $300 million. If the Restructuring is approved, the Company expects to incur restructuring charges of up to $200 million, substantially all of which is expected to be incurred from the date of the Spin-off through the first half of 2010.

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[Button Boy]

Can I get that in an eVite to the annual Crtistmas party? Nothing says "thank you for all your hard work and loyalty" like a pink slip.

[ewelch]

Laying off 1/3 of their staff, but their current level of customer service will remain the same?

[Random_Walk]

...at least the ones left behind will be able to get overtime? :/

[cbscowards]

Do they need customer service? Do they have any customers left?

[divsoft]

Why does AOL require 7,500 employees? What do they do again?

[solitare_pax]

They are in the business of transferring money from your pocket to theirs by doing as little work as possible. :) Just like the bankers and investment firms on Wall Street. <br /> <br />I hope the upper management is the section that volunteers to depart.

[YankeePoodle]

I agree with solitare_pax, it is the upper management hasscrewed up AOL, their business model was dying since Broadband showed up and since there is a push from Obama admin towards Broadband adoption, AOL has no room for sustaining their Business. Added to that they wasted millions on Bebo deal. My fear is AOL is for all good and bad reasons when it comes to content is Yahoo!-lite, which could not save them anything. <br /> <br />If you are firing 1/3 of workforce, you should fire 90% of upper management. But that is not how these geniuses in management work, if the company is humming they will get bonuses for their creativity and if it is not, slaughter the pigs.. a.k.a general workforce. Thats what I call, having you cake and eating it too.

[sismoc]

The sooner AOL is just a shadow in the rear-view-mirror of technological history, the better.<br /><br />Since day one they were a success because of aggressive marketing not due to providing any real value to their customers.<br /><br />When they bought Time Warner I was appalled. They had no real value and anyone with any foresight could see their days were numbered (dial-up was going to be eaten alive by broadband).<br /><br />Good bye AOL. You will not be missed. Take the honorable way out. Fall on your sword.

[clbrown52]

As long as the investors and market analysts are happy . . .<br /><br />My husband worked for a firm listed on Wall Street for 24 years. Decisions based on what the market analysts are looking for are always short-sighted, and cause damage to the company in the long run.

[dowell100]

I didn't realize AOL was still in business. I thought they were long gone.

[somosun]

no words!

[Greem_Macaw]

Just remember to tell them, if they voluntarily leave employment even if the company has asked for volunteers they may become ineligible for unemployment. Which could be why AOL is asking, its an excuse not to have to pay the state the benefits for those employees.

[smithjones]

@ Greem_ macaw : I agree with this statement. They just don't want to have to pay unemployment. Now if they were handing out money parachutes for leaving that might be different, depending on how much..., but of course that will not happen. Let them fire you, or lay you off.<br />Make them pay for their poor management style.

[igl00lgi]

Wow. Am I the only one that thought AOL, at most, had 500 people. 7k+? Someone should have invited them to the irrelevance meeting years ago.

[sharmajunior]

I guess they are running out of money to feed these people....C'mon, I mean, they are just volunteers, they work for free....

[drezjohnson]

The title of the article is a bit confusing...but after reading the article it sounds like what they are doing is actually looking for current paid workers to volunteer to be fired...they are not firing actually volunteers...i thought that sounded weird as well lol

[ben55124]

You've got fired!