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End of 2004 loses 646 thousand subscribers { December 7 2004 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A43585-2004Dec7.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A43585-2004Dec7.html
AOL Cuts 750 Jobs
By David A. Vise
Washington Post Staff Writer
Tuesday, December 7, 2004; 2:55 PM
America Online Inc., the nation's biggest Internet service, today began cutting 750 jobs, more than half at the firm's Northern Virginia headquarters, company officials said.
About 5,000 people work in AOL's offices near Dulles International Airport in Loudoun County.
While employees in Northern Virginia accounted for most of the cuts, AOL workers in Ohio, California and New York also were affected, officials said. Employees across the company's operations, from technology to marketing, were among those who lost their jobs. Jobs at AOL Europe were not affected.
AOL's corporate parent, Time Warner Inc., announced its plans to eliminate jobs at the Internet firm a month ago, when the company announced its third-quarter financial results. Time Warner said then that it would take an estimated $50 million charge to account for the restructuring.
The job cuts come at a time when the company's online service is losing hundreds of thousands of subscribers every quarter to faster or cheaper competitors. In its third quarter, AOL lost 646,000 subscribers, primarily among those who use dial-up Internet connections. The losses brought AOL's U.S. subscriber base down to 22.7 million, some 2 million less than it had one year earlier.
Last month, the company released a new version of its software designed to lure new subscribers with antivirus software and other online safety and security features.
AOL has been aggressively slashing costs to counter the subscriber losses, enabling the division to contribute about $1 billion annually to Time Warner, which has decided to retain its stake in the once-high-flying Internet company it merged with three years ago. AOL's advertising revenue also has begun to rebound. In addition, the company has revamped its corporate structure.
Meanwhile, Time Warner has been negotiating an agreement with the Securities and Exchange Commission on a possible deal to settle wide-ranging allegations of accounting irregularities at AOL. People familiar with the settlement talks have told The Washington Post that, under the proposed agreement, neither Time Warner nor AOL would admit or deny SEC allegations that the Internet division improperly pumped up its revenue and profit before and after their 2001 merger. Time Warner set aside $500 million as a reserve to pay for any such settlement, which also would resolve a related Justice Department investigation.
© 2004 The Washington Post Company
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