AOL to cut 5,000 jobs

NEW YORK — AOL said Thursday it expects to drop as many as 5,000 employees, or a quarter of its global work force, within six months as the company restructures its business to draw more online advertising dollars.

The changes are likely to shrink AOL's customer service center in Ogden, where about 400 employees were left after a round of layoffs in May, said a company source, who spoke on condition of anonymity because AOL has yet to reveal where the job cuts will take place.

Another source at AOL, also requesting anonymity, told the Deseret Morning News that although specific numbers were not being released Thursday, "it would not be wrong to say that impacts are expected to be felt in areas like customer service, marketing and in markets like Europe, where AOL is transitioning out of the access business." The source declined to provide details about Ogden.

AOL laid off 125 workers May at its downtown Ogden call center, which once employed 900 people. AOL has said it gave the departing workers 30 days severance pay and benefits, and help finding new jobs. The Ogden center opened in 1995.

The company said affected employees in this latest round of cuts will be notified of job reductions in late September or early October.

The announcement came a day after the Time Warner Inc. unit said it would no longer charge high-speed Internet customers for e-mail and other services in hopes of preventing their defection to rivals like Yahoo Inc., Google Inc. and Microsoft Corp., which long have offered free, ad-supported e-mail.

An unknown number of European employees will still have jobs but with a different company as AOL LLC looks to shed its Internet access businesses in France, Germany and the United Kingdom. AOL currently has 3,000 access employees in Europe.

But massive layoffs around the world are expected as AOL stops actively marketing its dial-up services in the United States and reduces its need for customer-support centers.

Layoffs had been anticipated. In announcing AOL's strategy shift Wednesday, Time Warner said it expected to spend $250 million to $350 million through 2007 to implement the changes, about half of that for employee severance.

Time Warner and AOL executives also said they expected to save more than $1 billion by the end of 2007 by cutting marketing, network and overhead costs. The cuts were necessary to avoid major hits in AOL's profitability as high-speed subscribers drop paid accounts.