AOL axes 10 percent of staff, “refocusing” on new structure

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Time Warner’s online arm AOL is set to cut 10 percent, or 700 workers, of its 7,000 employees around the world as its starts to see a fall in advertising revenue and “because of recent structural changes made to refocus the once-mighty service”, according to AllThingsD’s Kara Swisher.

While the reduction will take place in several quarters, most of the cuts will be in the United States and are expected to be competed by March.

aol06_pos_grad_blue_rgbIt’s recent shakeup saw the company focusing on three different parts of the company: Platform-A (advertising), People Networks (communications and social networking; includes AIM and Bebo) and MediaGlow (content “studio”). It will also consolidate many of its facilities in Silicon Valley, Los Angeles and in Dulles, Virginia – but they may remain open.

The focus on MediaGlow will allow it act more like Yahoo!, a content provider. While it has 75 different sites, with more to come; popular sites like, and are owned by them – and they could be mistaken to be just stand-alone brands.

And thanks to their acquisition of Weblogs Inc. in 2005, which included all their blogs and its powerful Blogsmith content management system, it has been actively using Blogsmith on many of its sites, and using the low-cost template of blogs to create brand new titles. Also, after being bought by AOL, Engadget and Joystiq are said to be multimillion-dollar businesses, according to a NYT report in early January.

However, the new restructure could be a way to prepare it to be sold to Yahoo, as Time Warner (which is the merged company of AOL and the previous TimeWarner – which AOL bought in 2001) is known to have tried to find a suitable buyer for the division.

Also, according to the AllThingsD report, it may “paring” its international business, which are said to be not as successful as their American counterpart. And that could be true as we look into AOL’s history in Australia – and it is their fourth attempt in the Australian market.