AOL continues to restructure and refocus its strategy while preparing to be spun off from Time Warner Inc. The Internet company is going to cut its workforce by one-third in the coming months.
The company, which employs about 6,900 people, said it will reduce its annual operating costs by $300 million. As a result of the layoffs and other measures, it expects to take charges of up to $200 million in the first half of next year.
AOL Chief Executive Tim Armstrong is in the midst of a campaign to sell the company to investors as an independent, publicly traded business after years of strategic shifts and disappointing financial performances under Time Warner's ownership. He launched an effort to reduce the company's cost structure called "Project Everest" four months ago.
At its height, AOL had more than 20,000 employees in 2004, a number that was roughly cut in half three years later. Many employees worked in call centers to serve the company's dial-up Internet access customers, The Wall Street Journal reports.
It was also reported, the company is in the midst of another in an endless round of restructurings, laying workers off, eliminating raises and generally cutting costs ahead of its share offering. Almost nobody thinks it has much in the way of financials. Revenue was down 23% in the third quarter, and advertising revenue was down 18%.
However, investors, as they are wont to do, are too pessimistic. That a decade of AOL bashing still carries over on the company's perceived prospects, which means it can only really surprise anyone on the upside.
A report on Wednesday about former AOL Chairman Steve Case, who bought Time Warner and became famous for donning a tie at the press conference -- as button-downed Time Chief Executive Gerald Levin showed up without one -- made me realize that sometimes there are second acts. After leaving AOL following the merger, Case went on to do many things, including joining a credit payments company called Revolution Money. That business was sold on Wednesday to American Express Co. for $300 million, MarketWatch reports.
In the meantime, Time Warner this week said the planned spinoff of AOL to shareholders will take place Dec. 9, and AOL will begin trading as a separate company on Dec. 10. The separation will undo the 2001 merger that led to record losses the next year.
Time Warner fell 88 cents, or 2.7 percent, to $31.94 at 10:33 a.m. in New York Stock Exchange composite trading. The shares, which Benchmark’s Moran recommends holding, increased 47 percent this year before today.
Armstrong told employees today that he will not take a bonus this year, Primrose said. He said it is not indicative of future payouts for the overall employee bonus plan, Bloomberg reports.
US President Joe Biden and Iraqi Prime Minister Mustafa Al Qadimi signed an agreement on July 26 to formally end the USA's military presence in the country by the end of the year