Joining a growing list of major technology companies announcing layoffs, Time Warner Inc.'s AOL unit is cutting 700 employees, which is about 10% of its staff. The news was originally reported by AllThingsD.com.
"The deepening economic recession has affected every corner of the economy, including our own," says AOL CEO Randy Falco (pictured) in a memo to the staff. "Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars."
In addition to the layoffs, the company will not be giving any merit pay increases this year. Other cost-cutting measures include consolidating facilities, such as moving from two buildings to one in Mountain View, Calif.
Perhaps the most interesting part of the memo, however, is Falco's description of AOL's turnaround plan in the context of the sea change in the media industry:
To provide some perspective on these decisions, right now we're two years into a three-year turnaround plan. Since day one, our strategy has focused on building and growing mutually dependent publishing, advertising and social media businesses to take advantage of the shifting media landscape. We've worked shoulder-to-shoulder to make considerable progress during this time. I
We acquired best-in-class companies across the digital advertising space (AdTech, Third Screen Media, Lightningcast, buy.at, TACODA and Quigo, respectively) and integrated them with Advertising.com to build Platform-A, the largest, smartest display advertising platform in the world.
We grew our MediaGlow audience via an efficient content development model that in 2008 enabled us to launch more than 20 new sites that are generating significant page view (up 64% year over year in December), engagement (up 39% year over year) and unduplicated user (70+ million) numbers. This momentum will continue in 2009 with our goal of creating an additional 30+ editorially curated sites focused on consumer passion points.
We combined Bebo with our longtime community assets AIM and ICQ as well as newer acquisitions Goowy, Yedda and SocialThing, to build People Networks, gaining AOL a foothold in the critical social media space, with more announcements to come on the next phase of development in both the social media space and in the integration of social and publishing capabilities.
This progress continues to put AOL in a strong position to capitalize on our new business model when the recession ends.
Other tech titans making similar cuts include EMC Corp., Intel Corp., Hewlett-Packard Co., Microsoft Corp., Sun Microsystems Inc. and Yahoo! Inc. - Mary Kathleen Flynn
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