AOL to reduce workforce by 2,000

AOL is trying to reposition its business

Internet firm AOL is to shrink its workforce further as it refocuses its business on online advertising, cutting 2,000 jobs worldwide.

About 1,200 jobs are going at its US operation - including 750 at its Virginia headquarters - while a further 800 foreign posts will disappear.

AOL said the changes would allow it to prioritise investment in key areas.

AOL is overhauling its business to reflect the shift in revenues from internet subscriptions to advertising.

Seeking growth

The number of people paying to subscribe to the internet through AOL has fallen 60% in the last five years.

To counteract this, the firm has moved to improve interactive content and other services to customers through advertising-funded initiatives.

It started offering free e-mail accounts and software services to non-subscribers last year.

The latest job cuts, accounting for 20% of AOL's workforce, come on top of the 5,000 positions in marketing and customer services jettisoned last year.

AOL said the restructuring would allow it to pursue acquisitions in key areas.

"This realignment will allow us to increase investment in high-growth areas of the company while scaling back in areas with less growth potential or those that are not core to our business," said chief executive Randy Falco.