AOL has cut more than 700 staff from it payroll, mainly in customer services.
The cull represents 4% of AOL’s workforce of almost 20,000 . The cuts are in response to a rapid fall in the number of AOL users who pay for dial-up internet access.
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The company said the redundancies would help it restructure the business in response to changes in the internet market.
AOL is currently striving to become a major broadband supplier, although in the UK it has come to rely on reselling BT’s wholesale broadband services, which do not provide high margins.
The Time Warner-owned company is also seeking to generate a higher-margin business built on providing voice over IP services via its web portal.
AOL is still a major player in web advertising, but is struggling to match Google in the market.