America Online Lays Off 300 Workers

AOL Time Warner Inc.’s beleaguered Internet division shed 300 jobs Wednesday and plans to eliminate several hundred more next year under a cost-cutting program designed to get the unit back on track.

The layoffs are the first wave of a plan unveiled last week by America Online Chief Executive Jonathan Miller, who pledged to cut the unit’s operating costs by “nine figures,” or at least $100 million.

The layoffs Wednesday amount to less than 2% of America Online’s 18,000 workers worldwide.

About half of the cuts will come at America Online’s headquarters in Dulles, Va., a company spokesman said.

An additional 60 engineering and Web-site related jobs will be eliminated at the company’s Mountain View, Calif., facility, home to AOL’s Netscape unit.

The remaining cuts will be scattered throughout the company’s other divisions.

Since taking the helm earlier this year, Miller has tried to instill a more somber, austere tone at America Online.

Last month he canceled the annual holiday party and laid off about 90 employees in the interactive marketing division.

Miller is hoping to convince Wall Street that he is serious about slashing costs and improving America Online’s earnings, which are expected to fall next year by 15% to 25%.

His turnaround plan relies on improving the America Online service with exclusive content provided by other AOL Time Warner companies and increasing the number of broadband Internet subscribers.

But layoffs are nothing new at America Online, which sheds jobs in good times and bad. Last year the company slashed 1,900 jobs.

Shares of New York-based AOL Time Warner fell 10 cents to $13.65 on the New York Stock Exchange.