Workers at AOL Inc. on Thursday got the news no one ever needs, but especially not in a recession.
The company, soon to spin off from Time Warner Inc., is asking for 2,500 employees – one-third of its base – to step up and accept voluntary layoffs from Dec. 4 through Dec. 11. And if too few people accept the offer, the involuntary axe-wielding will begin.
AOL told the Securities & Exchange Commission (SEC) it’s implementing the “proposed restructuring activities” to trim down in advance of its Dec. 9 spinoff from its media giant parent. AOL aims to save $300 million annually.
And it looks like CEO Tim Armstrong will do his part to help. The San Jose Mercury News reported on Thursday that Armstrong said he will forgo his 2009 bonus, which was to total at least $1.5 million.
“As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus,” The Mercury News quoted Armstrong as saying. “That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees.”
Meanwhile, AOL expects to take charges of up to $200 million for the layoffs through the first half of next year, the company said in its SEC filing.
AOL announced its impending breakaway from Time Warner on Tuesday. Time Warner stockholders will get one share of AOL for each 11 shares of Time Warner they own, the Wall Street Journal reported.
AOL will shift its focus from dial-up Internet access to online media content – which it already aggregates from hundreds of sources – and display advertising, as well as unspecified technology, as it tries to secure its share of online marketing money.
The new directions will place more onus on Armstrong, a former Google advertising executive who is working to turn around the once-dominant Internet company’s fortunes. AOL has watched its dial-up subscriptions and advertising revenue plummet for the past two years.
The Time Warner-AOL merger from the early years of the tech boom soon turned into a major bust; Time Warner overpaid for AOL and is seen as one of corporate America’s most disastrous deals ever.
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February 15 2019 @ 14:45:26 UTC