AOL is to cut a third of its workforce as it seeks to reduce annual costs by $300m.
The move forms part of a restructuring exercise following AOL's split from Time Warner, which is scheduled for 9 December.
AOL is offering voluntary redundancy to up to 2,500 employees between 4 December and 11 December.
"As a voluntary programme it is up to individuals to decide about whether they want to participate," AOL said. "If we don't realise the necessary cost savings, we will need to implement an involuntary programme to reach our goal of a one-third reduction in headcount."
At the same time, the company announced that AOL CEO and former Google executive Tim Armstrong has volunteered to forego his 2009 bonus, expected to be $1.5m.
AOL Europe spokesman Gavin Haycock told Computer Weekly, "There are about 400-500 people working [for AOL] in the UK, but due to the legal consultation process [required before redundancies can be made] I cannot say how many people might be affected."
The UK staff includes web editors, programmers and writers responsible for a range of lifestyle and technology sites.
Spokesperson Tricia Primrose said, "We will have to do an involuntary lay-off if we do not reach the target numbers through the voluntary option." A lower target of 2,300 redundancies would be set if this was necessary, she said.
The New York-based company employs 4,500 staff in the US and a further 2,300 worldwide. At its peak, AOL employed 20,000 people and boasted 26.7 million subscribers to its internet services. Subscriptions have dropped to 5.4 million.