Beleaguered internet service provider AOL has announced that it is eliminating another 2,000 jobs worldwide to cut costs and build its strength as it transitions from an ISP to an online advertising company. The 20% slice from AOL's work force comes after several rounds of layoffs in recent years, including a cut of 5,000 jobs last fall, all due to increasing difficulty in staying profitable in a market where many customers have begun moving away from dial-up to high-speed services offered by cable and telephone companies. "This realignment will allow us to increase investment in high-growth areas of the company - as an example, we added hundreds of people this year through acquisitions - while scaling back in areas with less growth potential or those that aren't core to our business," AOL Chief Executive Randy Falco told employees Monday.
To make up for declines in subscription revenues, AOL has been trying to boost traffic to its ad-supported Web sites and last year began giving away AOL.com e-mail accounts, software and other features once reserved for paying subscribers. Last year's job reductions were mostly in customer-service and marketing personnel as AOL opted to stop producing and distributing its notorious trial discs aimed at luring new subscribers. The latest cuts, by contrast, are expected to affect employees across the board. The move shows AOL's desire to slim down to what it believes it can do best. That includes developing Web sites such as its Moviefone and MapQuest properties to attract Web visitors in some 30 countries, Falco said, and building "the largest and most sophisticated global advertising network" for marketers to reach that online audience. In a memo to employees obtained by The Associated Press, Falco described the latest cuts as difficult but necessary.
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