Aug. 3 (Bloomberg) -- Time Warner Inc.'s AOL Internet unit said it plans to eliminate 5,000 jobs, or about 26 percent of the workforce, as it fires employees and sheds businesses in Europe to help revive profit.
AOL Chief Executive Officer Jonathan Miller told employees in a Webcast the cuts will take effect within six months, John Buckley, a spokesman for Dulles, Virginia-based AOL, said in an interview. The company has a workforce of about 19,000.
AOL has announced about 7,000 job cuts since late last year to save money as its Web access service loses subscribers. Time Warner yesterday said it will offer AOL's e-mail and security software for free to high-speed Internet users early next month. Time Warner President Jeff Bewkes said AOL profit this year will be unchanged even as sales drop and will begin to grow in 2007.
``Yesterday they laid out the strategy and today they began its execution,'' said James Goss, an analyst at Barrington Research Associates Inc. in Chicago, who rates Time Warner shares ``outperform.'' ``The job reduction is the byproduct of their decision.''
AOL is betting on the free service offer to attract users to its site and grab a bigger share of the online advertising market. The company is in talks to sell the Web access parts of the business in the U.K., Germany and France.
Shares of New York-based Time Warner fell 9 cents to $16.58 at 2:13 p.m. in New York Stock Exchange composite trading. Before today, they had fallen 4.4 percent.
AOL, an Internet pioneer founded in 1985, has lost 9 million U.S. access subscribers in four years as users moved to broadband and got free e-mail from companies such as Yahoo! Inc.
The unit cut 700 jobs at the end of last year and an additional 1,300 in May.
AOL Chief Executive Officer Jonathan Miller told employees in a Webcast the cuts will take effect within six months, John Buckley, a spokesman for Dulles, Virginia-based AOL, said in an interview. The company has a workforce of about 19,000.
AOL has announced about 7,000 job cuts since late last year to save money as its Web access service loses subscribers. Time Warner yesterday said it will offer AOL's e-mail and security software for free to high-speed Internet users early next month. Time Warner President Jeff Bewkes said AOL profit this year will be unchanged even as sales drop and will begin to grow in 2007.
``Yesterday they laid out the strategy and today they began its execution,'' said James Goss, an analyst at Barrington Research Associates Inc. in Chicago, who rates Time Warner shares ``outperform.'' ``The job reduction is the byproduct of their decision.''
AOL is betting on the free service offer to attract users to its site and grab a bigger share of the online advertising market. The company is in talks to sell the Web access parts of the business in the U.K., Germany and France.
Shares of New York-based Time Warner fell 9 cents to $16.58 at 2:13 p.m. in New York Stock Exchange composite trading. Before today, they had fallen 4.4 percent.
AOL, an Internet pioneer founded in 1985, has lost 9 million U.S. access subscribers in four years as users moved to broadband and got free e-mail from companies such as Yahoo! Inc.
The unit cut 700 jobs at the end of last year and an additional 1,300 in May.
Facebook
Twitter