Fewer than 50 layoffs expected at Advertising.com

Cuts are part of change in strategy for parent AOL

January 14, 2010|By Gus G. Sentementes | gus.sentementes@baltsun.com

Fewer than 50 workers are expected to be laid off this week from Advertising.com, a major Baltimore-based subsidiary of AOL Inc., as part of a change in strategy for the Internet giant, according to company officials.

AOL spun off from Time Warner Inc. last month and is trying to transform itself primarily into a producer of online advertising and editorial content. AOL bought Time Warner, based in New York City, in 2001 in an acquisition that is now widely regarded as one of the worst business deals in history.

Alysia Lew, an AOL spokeswoman, confirmed layoffs at Advertising.com but declined to say how many employees had volunteered for a buyout and how many were being laid off. She said the number would not trigger a federal requirement that employers provide notice of layoffs of more than 50 people.

Late last year, AOL said it needed to cut about a third of its work force - or 2,300 people - and would try to get workers to leave voluntarily through a buyout program.

But the voluntary buyout program, which began in December, brought in only about 1,100 volunteers - including a number of volunteers at Advertising.com in Baltimore. A company spokeswoman said the company still needs to lay off another 1,200 people.

AOL has indicated that the majority of layoff notifications were expected Wednesday. More than 300 people work at Advertising.com at the Tide Point complex in Baltimore's Locust Point neighborhood.

The cuts will leave AOL at less than a quarter the size it was at its peak in 2004, when it had more than 20,000 employees. Before the latest layoffs and buyouts, AOL had about 6,900 employees.

AOL, which is also based in New York City, still operates its legacy dial-up Internet business, but revenues have declined as more and more consumers shift to broadband services to use the Web.

AOL said in November it would take $200 million in charges for severance and restructuring-related costs.

The Associated Press contributed to this article.

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