AOL is to cut 900 jobs, about 20% of its global workforce, following the completion of its $315m (£196m) Huffington Post acquisition.
Most of its jobs will be cut in India where it will axe 400 positions and outsource another 300. A further 200 will go in the United States. The move is designed to avoid duplication of roles across AOL and the Huffington Post, says the company.
Tim Armstrong. AOL's CEO, said no additional job losses were imminent, but refused to rule out further staff cuts at the company. "Right now there are no future changes planned, [but] in our situation we don't have the luxury of long-term planning," reported the Financial Times.
Richard Holway, co-founder of analyst firm Tech Market View, said the company faces serious problems as it still makes 80% of its profits (not revenues) from dial-up internet access.
"Reports recently suggest that many of these are old people who just don't realise they are still paying $25 a month for a service they no longer get because they have moved (or could move) up to broadband. To call this a "dying market" seems somewhat cruel. The market doesn't have the greatest faith in the Armstong plan either - marking the stock down another 25% since his arrival," he said in a blog post.