AOL, Netscape lay off 850

For thousands of anxious workers at America Online and its newly acquired Netscape Communications unit, today was the day of reckoning, as about 850 employees lost their jobs, according to AOL.

"Our commitment was to move as quickly as possible to finalize decisions and let people know all in one day," said AOL spokesman Jim Whitney, who confirmed the layoffs.

Managers informed employees in face-to-face meetings today in what one Netscape staffer described as a "somber" mood on the Mountain View, California, campus.

The layoffs were in the middle of the range AOL had quoted: 350 to 500 employees from Netscape and a similar number from AOL.

Areas that saw heavier layoffs included AOL's technology department and the Interactive Services group, and Netscape's Netcenter portal site, said an AOL executive who asked not to be named. Other layoffs were spread across departments including marketing and administration.

Workers sheltered from the layoffs included developers and engineers.

AOL today sent out offer letters to retained employees at Netscape, firming up details regarding job descriptions, salaries, and titles.

Laid off workers will receive three months' pay and three months' health coverage. AOL has retained outplacement and career transition firm Drake Beam Morin to assist laid off employees in finding new positions.

Employees at both firms have anxiously awaited news of the layoffs since they were announced last week. AOL took the extraordinary step of spreading the layoffs out equally between the two companies, though because AOL is about four times the size of Netscape the smaller company was disproportionately hit.