AOL may lay off a third of its staff — up to 2,500 workers — as part of a restructuring related to the company’s coming spin-off from Time Warner Inc., the unit told regulators Thursday.
In a filing with the Securities and Exchange Commission, AOL said it had informed employees of the layoffs, which are conditioned upon its successful spin-off from Time Warner. The transaction is slated for Dec. 9.
AOL told employees it has announced a voluntary layoff program that starts Dec. 4 and runs through Dec. 11. The company is offering buyouts to as many as 2,500 employees.
If it can’t achieve the cuts it needs through the buyouts, AOL will have to resort to involuntary layoffs.
AOL intends to save $300 million annually via the restructuring, it said in the filing. The company also said it would take related charges of as much as $200 million, which would be accounted for some time before the end of the first half of 2010.
And in an e-mail to employees, the company said CEO Tim Armstrong will surrender his bonus for the year, which had been expected to be in a range of $1.5 million and $4 million.
“That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees,” Armstrong said in the e-mail, which was obtained by Dow Jones Newswires.
Time Warner announced the spin-off of AOL last May, ending a tumultuous association that began when AOL acquired the world’s largest media company for $106 billion in 2001.
For several years, Time Warner tried to transform AOL away from its legacy business as a dial-up Internet access provider into an advertising-driven unit focused on the AOL.com portal. However, display advertising began to slow down in 2006 — a slide was exacerbated by the worldwide economic collapse of 2008.
In spinning off AOL, Time Warner Chairman Jeff Bewkes is spearheading a move to focus his company’s efforts back on its core film and television businesses.
(c) 2009, MarketWatch.com Inc. Source: McClatchy-Tribune Information Services.