Time Warner’s America Online division is cutting 10% of its workforce. Some 700 jobs will be eliminated by March.
Such news is not unique. This week saw thousands of jobs lost among newspaper and magazine publishers, and companies including Cannon and Yahoo! reported substantial revenue losses. Microsoft announced massive layoffs last week.
However, AOL’s reasoning gives new cause for concern. All recent ad-revenue projections have predicted substantial losses over the next two years, with the exception of the online advertising market, expected by experts to continue healthy growth. It seems this may not be so.
AOL chief executive Randy Falco announced the layoffs in an employee memo, republished by various media outlets. Falco wrote that online marketers have already reduced advertising spending by hundreds of millions of dollars. AOL revenue is expected to decline by 12% during the fourth quarter.