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Wednesday, 22 August, 2001, 04:47 GMT 05:47 UK
AOL cuts 1,200 jobs
Logos of the AOL Time Warner group
The internet and media giant AOL Time Warner is cutting more than 1,200 jobs at its AOL Internet unit.

The job cuts represent the third round of layoffs at the company since AOL and Time Warner completed their merger at the start of the year.

The internet unit, which employs about 16,000 staff, said it would also cut a further 500 jobs as part of an alliance between Netscape and Sun Microsystems.

The job cuts had been expected and are seen as necessary if AOL Time Warner is to hit its earnings target for this year.

Ad revenue drop-off

Analysts expect the company to have suffered from the slowdown in the US economy and from reductions in advertising revenues.

In January, the firm cut 2,400 jobs, and this summer said it would cut a further 3,800 jobs by closing down its Warner Bros Studio Stores.

The company said this new set of job cuts meant it would take a charge in the third quarter of up to $125m.

AOL said it would bring together all of its web brands into one unit.

The AOL Web Properties Group will cover Netscape, CompuServe, Moviefone, MapQuest and AOL Instant Messenger services.

Broadband expansion

The flagship AOL internet service will become part of a new AOL Interactive Services Group. This group will contain a section aimed at creating "new programming and cross-brand advertising and commerce opportunities" in areas such as music and entertainment.

AOL also said it would expand the role of its broadband group.

"This new organisation enables us to stay at the leading edge of the Internet's development and take full advantage of emerging growth opportunities in areas like broadband, online music and home networking," said AOL's chief executive Barry Schuler.

"In the seven months since the merger, we have continued to identify new ways to leverage shared resources across AOL Time Warner and now we are putting them to work," he added.

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The BBC's Gillian Ni Cheallaigh
"The world's web leader is not escaping"
See also:

25 Jul 01 | Business
AOL snaps up IPC magazines
30 Apr 01 | Business
AOL seeks UK cable alliance
16 Apr 01 | Business
AOL surfs past 29m subscribers
24 Jan 01 | Entertainment
BBC warned over magazine trails
12 Jan 01 | Business
Giant of the dot.com world
01 Jul 01 | Business
Global ad industry hits buffers
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