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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Maybe it hasn't worked so well to mesh the short-video-clip culture of the Web with traditional cable news: Current Media, the edgy cable company co-founded by former Vice President Al Gore, announced Wednesday it has laid off 80 employees in conjunction with a programming shakeup.
According to a release from the company, this shift involves canceling a number of programs, including "Current Tonight," "Current Takeover" and "Current Exposed." Most of the layoffs are in conjunction with those programs.
Additionally, per Wednesday's release: "Current will be shifting away from short-form programming and daily in-house production and towards proven 30-60 minute formats from a multitude of sources, including acquisitions, co-productions, outside studios, as well as Current developed and produced content." So it sounds like there will be a significant amount of new focus on outsourced material rather than more expensive in-house production--and perhaps less of an attempt to compete with well-established, live cable news networks.
Exactly one year ago, Current--headquartered in San Francisco but with many of its production operations in Los Angeles--laid off about 60 people but said that it was also creating about 30 new positions, which left its head count around 410 employees. Current chief operating officer Joanna Drake Earl told CNET News that this year's cuts leave its employee numbers at around 300.
The release said that the cuts were "not the result of a need to cut costs" and that the company would be hiring in areas like talent management, licensing, marketing, and ad sales. It'll also be consolidating its two L.A. facilities into a single new one.
"We've been an extremely innovative company doing lots and lots of different things," Earl said, "but (we've had to ask) what are we doing for our audience, and what shouldn't we be doing."
The company had filed for a $100 million IPO about two years ago but then retracted it amid concerns about the economy. It's repeatedly had to deflect rumors about its viability, like a report early this year that it would be closing its San Francisco headquarters to focus on L.A.
This post was updated at 2:10 p.m. PT with comment from Current's COO.
The Seattle area is going to get another jobless jolt Thursday, with RealNetworks planning to lay off 4 percent of its workforce, sources said.
That's a small number--just about 70 people out of its 1,700-person staff--but the move comes on the heels of layoffs of another 800 employees at nearby Microsoft on Wednesday. The software giant has cut thousands of jobs over the last year, part of a move to eliminate 5,000 positions by mid-2010.
While the dismissals--which are likely to be announced to affected RealNetworks employees sometime Thursday morning by managers--will be global, both RealNetworks and Microsoft are tech leaders with headquarters in the Pacific Northwest.
According to sources, the reasons for the layoffs at RealNetworks are, as was the case at Microsoft, to realign the work force after the recent economic downturn and to control costs.
But RealNetworks could also hire back some of the laid-off employees, as other parts of the company are expanding.
The company had signaled the possibility of staff cuts previously, but had not been specific.
The last staff cuts at the company, which makes digital media software and tools, were larger, with about 130 employees sacked about a year ago.
RealNetworks announced better-than-expected third-quarter earnings last week, barely returning to profitability by cutting costs to make up for weaker revenue.
(Digital Daily's John Paczkowski contributed to this report.)
Story Copyright (c) 2009 AllThingsD. All rights reserved.
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This post was updated at 1:40 p.m. PDT with RealNetworks' correction of the percentage of employees laid off.
Entertainment software company Real Networks laid off 12 employees within its music division or about 9 percent of the division staff, the company said Thursday.
The cuts come a week after RealNetworks reported marked decreases in the number of subscribers at its Rhapsody music subscription and online radio units.
Rhapsody, which is partly owned by Viacom's MTV Networks, lost 50,000 of its 800,000 subscribers over the past three months, RealNetworks said last week in its second-quarter earnings report.
In addition, a partnership with telecom company Comcast ended and that was blamed for a dramatic drop-off in RealNetworks' radio subscribers, from 1.2 million down to 75,000, the company reported. That's not a typo. When Comcast discontinued the service, more than 1.1 million no longer had access to Rhapsody.
RealNetworks' revenue for the second quarter fell 11.1 percent to $135.7 million, the Seattle-based company said.
RealNetworks CEO Rob Glaser said the slide in Rhapsody subscribers was partly due to a rise in the number of credit card defaults, which he said was likely brought on by the bad economy.
No matter what the reasons, Rhapsody's performance will not be welcomed news to for proponents of music subscription services. The sector is a favorite of many at the major record companies, but has failed to catch on.
Social-networking giant MySpace is cutting 300 international jobs--two-thirds of its workforce outside the United States.
The company, which already announced a 30 percent layoff in the States last week, said on Tuesday that it will reduce its overseas staff from 450 to 150 employees and close at least four foreign offices. MySpace also announced proposed restructuring that will narrow its international focus to a "smaller number of territories."
"As we conducted our review of the company, it was clear that internationally, just as in the U.S., MySpace's staffing had become too big and cumbersome to be sustainable in current market conditions," CEO Owen Van Natta said in a statement.
As part of the restructuring, London, Berlin, and Sydney will become the "primary regional hubs" for the company's overseas business. "All existing offices in Argentina, Brazil, Canada, France, India, Italy, Mexico, Russia, Sweden, and Spain (are) under review for possible restructure," MySpace said.
The company added that MySpace China, which it described as a "locally owned, operated, and managed company," and MySpace's joint venture in Japan won't be affected by the restructuring.
Combining both layoffs, MySpace's is cutting its total workforce from about 1,950 to 1,150--or by about 41 percent.
Amid economic woes, stagnant growth, and a management shakeup, onetime social-networking pioneer MySpace has announced that it has cut its head count by slightly under 30 percent in what the company calls a "return to start-up culture." Well, that's a nice way to put it.
Reports had circulated that MySpace would be laying off nearly half its employees in a move that had delayed its relocation to a bigger office space in the Los Angeles area. With the layoffs, MySpace's full-time U.S. employee roster will be down to 1,000 people--which means somewhere just south of 500 jobs were cut.
MySpace said that the layoffs are evenly distributed across all U.S. divisions of the company. Since MySpace also operates a number of offices overseas, it's not yet clear how they were affected (if at all), and representatives declined comment as to whether international offices would be affected down the road. CNET News has heard rumors that there may be consolidation in some of MySpace's European offices, something that the company did late last year when it merged its Amsterdam and Berlin offices.
"Today the domestic restructure is the only info we can share," a MySpace representative said in a phone call Tuesday.
Owen Van Natta, CEO of the News Corp.-owned social site, said in a release: "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company. I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product."
Van Natta, the former chief operating officer at Facebook, was hired as CEO of MySpace late in April after a short stint at the head of start-up Project Playlist. Former CEO Chris DeWolfe had stepped down earlier that month, reportedly at the behest of Jonathan Miller, the new digital czar at News Corp. Executive shakeups at MySpace had been happening sporadically for nearly a year at that point.
MySpace's new executive lineup gives it solid entertainment street cred: Van Natta was joined by former MTV digital exec Jason Hirschhorn and former AOLer Michael Jones. Late last year, another MTV digital-media executive, Courtney Holt, joined MySpace as the head of its new MySpace Music division.
A source with knowledge of the situation said that senior management was spared Tuesday's cuts.
Launching MySpace Music, which focuses on free streaming music supported by advertising, was a return to the company's roots: once a hub for indie band promotion and community, MySpace had grown massive before Facebook began to catch up to it in international and then U.S. traffic. Partnerships with the likes of Google and a prominent endorsement of the OpenSocial developer initiative didn't help it regain traction as a networking destination.
Holt told CNET News in March that MySpace Music's traffic was "huge." But record label executives--who are partners in the MySpace Music joint venture--reported dissatisfaction with the revenue it was generating.
Last update at 11:56 a.m. PT.
Updated 7:55 a.m. PDT with a detail about selling HotJobs.
Yahoo is rumored to be planning to announce more layoffs next week, its third round of cuts in a little more than a year, according to a report Tuesday in The New York Times.
The layoffs could affect hundreds of employees and could be announced as early as April 21 when the embattled search pioneer announces its first-quarter financial results, according to the report.
Yahoo representatives declined to comment on the report.
The report also said Yahoo has been trying to sell off its HotJobs job listing classified-ad business, a move that could complicate Yahoo's advertising partnerships with newspapers.
Yahoo, which finished last year with 13,600 employees, has undergone plenty of reorganizations and executive turmoil in the past year, as well as two major layoffs. Yahoo laid off 1,520 mostly U.S.-based employees in December and 52 of 251 employees based in France earlier this year. Those layoffs followed a round in January 2008, in which an estimated 1,100 employees were laid off.
In February, Yahoo appointed Carol Bartz as the successor to Yahoo co-founder Jerry Yang, who under fierce financial pressure announced in November that he would step down as CEO when the company's board had selected a replacement. Bartz then announced a sweeping reorganization in February aimed at making the Internet pioneer faster, simpler, and more responsive to those who use its services.
Yahoo, which has steadily lost search market share to Google and has been particularly hard hit by the economic recession, has reportedly been in preliminary talks with Microsoft to form a search and advertising partnership.
CNET News staff writer Stephen Shankland contributed to this report.
For the second time in five months, Wired.com, the Internet arm of Wired magazine, has trimmed its staff.
(Credit:
Wired.com)
According to a Twitter post from Evan Hansen, the Web site's editor in chief, the company laid off 3 out of 25 full-time staffers or 12 percent of its workforce.
"Reports of Wired.com 'gutting' greatly exaggerated," Hansen wrote on Twitter, presumably referring to published reports about Wired.com's layoffs. "We cut three staff, five contractors, (and) still have 45 people working for us overall."
Among those who lost their jobs was Eliot Van Buskirk, a much respected digital music reporter who authored the blog ListeningPost for the Web site for over three years, according to multiple people within the company. Van Buskirk was a part-time contractor for Wired and is a former CNET employee. Leander Kahney, Wired.com's managing editor, also lost his job, but he requested that he be let go, the sources said.
In November, Wired.com laid off 10 percent of its staff. Wired magazine was once a must-read for the cybergroovy but has since had to contend, like all print publishers, with more competition from online sources of technology stories.
Google is eliminating about 200 sales and marketing jobs, the company said in a blog post Thursday, blaming the move on overlapping areas and overhiring during a more optimistic time.
"Today we have informed Googlers that we plan to reduce the number of roles within our sales and marketing organizations by just under 200 globally," said Omid Kordestani, senior vice president of global sales and business development, in the blog post. "We did look at a number of different options but ultimately concluded that we had to restructure our organizations in order to improve our effectiveness and efficiency as a business."
Those losing their jobs will get severance and a crack at other openings at the Mountain View, Calif.-based company, which had 20,222 employees at the end of December.
"Google has grown very quickly in a very short period of time. When companies grow that quickly it's almost impossible to get everything right--and we certainly didn't. In some areas we've created overlapping organizations which not only duplicate effort but also complicate the decision-making process. That makes our teams less effective and efficient than they should be. In addition, we over-invested in some areas in preparation for the growth trends we were experiencing at the time," Kordestani said.
Google has shaken up even Silicon Valley with its fast growth in revenue, size, and ambition, but it's not immune to the global economic woes, and it's been trying to improve its profitability by cutting underperforming projects such as a print advertising initiative. Last year, Google started paring back its contractor workforce, and this year, Google cut 100 recruiters and 40 in a canceled radio ad effort.
LaidOffCamp, held during daylight hours this week at the Temple night club in downtown San Francisco, brought together more than 600 unemployed and self-employed people seeking to share ideas about finding work amid the recession.
Volunteers, speakers, and sponsors came together to plug networking, information exchange, social media, and interconnected community as ways to find support and, hopefully, an income. Among the crowd, there were also entrepreneurs, venture capitalists, and recruiters.
Another 16 such events are preliminarily scheduled across the nation, with the next one set for Friday in Dallas. But, not surprisingly, San Francisco was the first to play host to this unemployment un-conference.
