AOL Time Warner's plan to stabilise and boost America Online (AOL)
will include cutting $100m in operating expenses, partly through
the elimination of hundreds of jobs.
Sources claimed AOL vice-chairman Joseph Rippat, the executive
overseeing the company's restructuring plans, has informed managers
that no division of the world's largest ISP will be immune from the
job cuts.
Representatives at AOL could not immediately be reached for
comment.
News of the massive cost-cutting measures comes three days after
AOLTW executives laid out plans for turning around AOL. AOLTW
insisted it could boost AOL's fortunes by generating more revenue
from its 35 million subscribers through broadband and premium
services, while reining in costs, retooling advertising offerings
and restoring the company's integrity.
AOLTW announced earlier this week that it expected steep declines
of up to 50% in its AOL commerce and advertising revenue for 2003.
AOL employs more than 5,500 people in its northern Virginia
headquarters and also has offices in New York, California and Ohio.
Along with cutting jobs, mainly in Virginia, AOL was also looking
to save money on computer network expenses.
On Thursday, Miller held a meeting with AOL's 250 division heads to
detail the cutbacks required in strategic areas to shore up the
business. Miller warned in the meeting that the company needs to
set realistic goals for Wall Street to restore the company's
credibility.
AOL has been forced to restate financial results, and federal
investigators are looking into whether former AOL executives
purposely misled accountants and others in an effort to inflate
revenue figures artificially.