AOL cuts 4% of workforce

DULLES, Va. -- Time Warner Inc.'s America Online division, the biggest US Internet service, said it cut 750 jobs, or about 4 percent of its workforce, amid subscriber losses.

Half of the reductions are in Dulles, Va., where AOL is based, spokesman Jim Whitney said yesterday. The rest are in California and Ohio. AOL has about 20,000 employees. The company is cutting in most departments, including in software development and marketing, he said.

The online service of the world's largest media company has lost customers for seven consecutive quarters as more Web surfers access the Internet through high-speed connections offered by cable and telephone operators such as Comcast Corp. and Verizon Communications Inc.

On Nov. 3, New York-based Time Warner said America Online was "undertaking efforts to realign its resources," which may cost about $50 million in the fourth quarter and the first half of next year.

AOL as of Sept. 30 had 22.7 million customers in the United States. Last quarter, the service lost 646,000 dial-up subscribers and lured 470,000 to sign up for a more expensive broadband product that offers faster connections and more features.

Time Warner is shaking off the effects of its $124 billion acquisition by AOL in 2001. Shares of Time Warner have lost 60 percent of their value since then and Stephen Case is the only AOL executive left on the company's board.

The Washington Post on Nov. 2 reported Time Warner was planning to fire more than 700 workers this month. AOL cut 450 employees, or 2 percent of its staff, a year ago.

Time Warner chief executive Richard Parsons said Monday at UBS AG's media conference in New York that owning AOL was an "opportunity to benefit from the fast-growth Internet sector."

Revenue at AOL rose 1 percent to $2.1 billion in the third quarter, helped by the purchase of Advertising.com, which helps companies plan and track Internet-based marketing campaigns. AOL's advertising sales will reach about $1 billion in 2004, Parsons said Monday.

The unit's dial-up subscribers pay $23.90 a month. Its broadband service costs $14.95 a month and customers must pay for their own high-speed access to the Net.