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AOL to cut 700 jobs

America Online (AOL) plans to lay off 700 employees, about 5% of its US workforce, by the end of the year.

Most of the layoffs will be at AOL's headquarters, according to the Washington Post, which said some employees have already been warned of the coming cuts.

An AOL spokesman declined comment. AOL's corporate parent, Time Warner, was scheduled to report its third-quarter results on 3 November.

AOL has struggled to maintain its subscriber base, as rivals cut access costs and telephone and cable companies compete for customers with dedicated internet service providers.

As of 30 June, the end of Time Warner's second quarter, AOL had 23.4 million subscribers, down 668,000 from its total a year earlier. The unit has eked out operating income growth in the first two quarters of 2004 despite essentially flat revenue.

In late 2003, AOL shed 450 jobs when it closed two offices in California.

Stacy Cowley writes for IDG News Service


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