When employees walk into AOL’s offices Tuesday morning, 1,200 of them will be quickly pulled aside by their managers. They will be handed packets with details of their severance packages and told to pack their things and leave the building.
(Photo: Charles Dharapak/Associated Press)Today, Randy Falco, AOL’s chief executive, sent out a memo saying the company would eliminate 2,000 of its 10,000 jobs. Most of those cuts will come in the form of 1,200 layoffs to be announced Tuesday, an AOL spokeswoman said. Most of the remaining cuts will be in Europe and India, but there will be some more to be announced later in the United States.
Employees will be given a severance package of at least four months pay, the spokeswoman said. This will include a payment equal to two months pay in lieu of work as a way to comply with federal law, which requires companies to give 60 days notice before major cutbacks. Most laid-off employees, however, will not be asked to work after Tuesday.
The cutbacks this year follow a restructuring last year that eliminated 5,000 jobs, largely associated with AOL’s Internet access business. AOL sold its access operations in Europe, closed its customer service operations that were based in the United States, and completely stopped marketing to get new access customers.
The layoffs this year are spread through the organization as Mr. Falco is trying to streamline management in keeping with his leaner vision for the company, focused on its advertising business.
It is truly sad to see the great promise that was AOL become completely irrelevant."
2007
4:27 pm
Aproxmiately 120 Million freed up in resource money and the work load doubles or triples for it’s current employees. –The motionless, unballast clipper slowly will begin to show its’ keel in the international seas.
— Posted by F.Ockham
2007
4:34 pm
Your company let you go? Don’t Worry! We’re on your side.
Perhaps you’ve been “fired”, “downsized”, “laid off”, “let go”, “outsourced”, “discharged”, “position eliminated”, “restructured”, or some other euphemism for being terminated. Yes, this is a stressful time in your life, but being terminated from your company could be the best for you and your career! Millions of times a year, people leave jobs for other ones.
Perhaps your company has already handed you a severance package? It’s not a “take it or leave it” situation—you can and must negotiate your severance package in order to obtain what you deserve and have earned.
Relax. We’ll help you get the best severance pay package…www.CareerProtection.com
— Posted by Scott Baker
2007
4:41 pm
Go to Nordstrom.com always hiring click on careers……………
— Posted by Angela
2007
4:42 pm
maybe aol is waking up. I had aol for about two months and I was charged for two different site when
I only had one. It still is not straightened out.
I still get calls from India saying I owe aol money.Each caller says they will set it straight
to no avail. I would never use aol as my internet
provider again
— Posted by david ford
2007
4:45 pm
How did F. Ockham come up with ‘double or triple’ the workload, I wonder? Sounds far-fetched to me, considering we’re only talking a 20% reduction in workforce to be in effect.
— Posted by PhilipB
2007
4:49 pm
Tell me again how wonderful the economy is doing because what with the thousands of layoffs being announced daily by highly profitable companies, the millions of bankruptcies and foreclosures, I’m a little foggy about whose economy is wonderful. It sure ain’t wonderful for tens of millions of Americans whose jobs and careers have been destroyed so that Bushworld supporters and funders can get richer.
— Posted by windrider
2007
5:02 pm
In this weak economy you see or hear of people winning the lottery, something beyond their wildest dreams, I would feel blessed. Wouldn’t you? But that’s not the point. The point being I don’t agree with layoffs of significant numbers of employees and give them a severance package in lieu of work as AOL has done, sounds effectively creepy, helps to streamline until business softens, and profits suddenly shoot up. Then the crazy thing about all of this streamlining is that you have to start all over again with another enthusiastic promise of job security? That’s what so spooky about the economy–there’s always going to be egg on your face.
— Posted by William212
2007
5:07 pm
That’s right, windrider. Bush created the web and high speed internet access and made the AOL business model of dial-up access to proprietay content obsolete. How mean of him. I bet Cheney traveled through time to create the automobile in order to put buggywhip makers out of business, too.
Poorly run companies selling a product people don’t want tend to fail.
— Posted by Andy
2007
6:09 pm
Like a lot of my fellow ex-AOLers, we drank the CoolAid; believed Steve Case’s promise that we were building a something that was as “central to people’s lives as the telephone or television … and even more valuable.” And it could have been…
It is truly sad to see the great promise that was AOL become completely irrelevant.
— Posted by Matt W.
2007
8:16 pm
20% reduction in workforce can double or triple the average person’s workload if the reduction is concentrated in a single department.
And why should the average person work harder for the same money, with raises on hold, no more bonuses, a dwindling future for the company, and with a sour stomach that you may be on the next round of layoffs.
— Posted by Kashif Shaikh
2007
8:57 pm
Maybe Sprint is next. Given their service level, they would do best with no employees.
— Posted by Alex Jacobson
2007
10:00 pm
The only relevant fact is that AOL no longer offers a product people want. Ten years ago, before readily available broadband and a population that was unfamiliar with the internet, AOL had a good product. They haven’t adapted with the times, so they’re downsizing as a prelude to their ultimate collapse.
But it’s all Bush’s fault!!!!
— Posted by TMK
2007
1:51 am
AOL was still in business? Doing what?
Guys, you don’t get it? America i goig down. There is no more American dream. If you think there is an American dream, you need to wake up from that damn dream and slap yourself. Eventually, America will become servicing industry with a bunch of home based business competing against each other.
You better get ready to get your own home based bzness atarted right now or get ready to move to India or overseas somewhere they have a job for your skill.
I’m leaving it right now with two degrees (Electrical engineering and Computer science) and 5 IT certifications. I have interviewed with three companies, they said I was over qualified.
Now tell me what else to do?
— Posted by EJL
2007
5:05 am
Why is it traditional in the computer and Internet industry to fire people with zero days notice? You come in, somebody hands you a box to pack up your desk, and then security guards escort you out to the parking lot. I’ve heard this many times, but why? To make sure you don’t hack into their databases (surely these are secured anyway), or replace your boss’s screensaver with a picture of shaved-head Britney? I can’t help feeling that it’s just tradition not to give any notice.
This is a sincere question - I’ve not worked at any tech companies, and I now work in soft-money academia, where there’s no security but you know when your contract is ending. I know the tech industry generally pays well and pays severance, so I’m not necessarily lambasting the employers, but these policies seem designed to engender maximum resentment, and maximum insecurity in the remaining workers. Maybe that’s the idea, but it seems like bad business in the long run. If these companies care about the long run.
— Posted by Ben
2007
8:33 am
“Why is it traditional in the computer and Internet industry to fire people with zero days notice?”
There are several reasons:
1. Other than the databases (to which people who have been fired often have access to BTW), there are usually tons of confidential documents/systems that most people can access/steal/compromise.
2.Many of the jobs in IT are project based — onthe project is cancelled, the extra people are at best a distraction. Usually having tons of disgruntled employess around for no reason is not a good idea.
3. Severance pay — employees get severance, but contractors don’t — there are savings to be had by laying off people immediately. Even for employees there is less overhead required, so it is still to a companies advantage to lay-off people.
4. Usually a 20% cut would not greatly increase workloads. In any case if projects are cancelled as well (as is expected when a company is in cost cutting mode), there will be a lot of people that the company wants to retain whohave nothing to do.
5. A company always has employees that are not very productive, and this gives them an oppurtunity to lay them off easily
6. In tech, there is not much of a culture of employee/employer loyalty.
7. No Unions.
The only reason to retain a person would be if a person has knowledge that needs to be transferred, skills that are difficult to replace, or if he is performing a job for which there are no adequate replacements
— Posted by rajivsundar
2007
11:26 am
There is a high degree of paranoia in high-tech circles, with good reason. Everything, even when deleted, can be traced. I also think the nature of the interactive industry is such that, once a decision is made, people move immediately so as to not waste any more time or money and that, of course, is completely impersonal.
I went through a layoff from AOL, like so many others. It was as civil as it could have been. At the time, it was very disconcerting - I loved working there and what the company represented. I didn’t have the proper perspective on the situation - I wasn’t tough enough and thought it was all my fault. But market forces being what they were at the time, it all made sense and makes more sense now. It actually was a real gift to be let go - turning around someone else’s ship probably would have frustrated me to no end.
— Posted by Jennifer
2007
12:49 pm
Hopefully, AOL will give their fired employees 3 months of aol service as compensation so they can stay online and search for new jobs.
— Posted by ken baltimore
2007
12:52 pm
I got out 1.5 years ago.
Thank God.
Thank God.
I couldn’t believe no one else took my advice to act. It was reminiscent of imploring people to seek higher ground due to an impending tsunami. Totally futule.
— Posted by George
2007
1:52 pm
AOL’s methods sounds terrible, but it’s certainly better than the method my company is using. Our layoffs were announced several months ago, and everyone has been walking on eggshells since wondering if they’ll be hit.
AOL is doing it like ripping off a band-aid - it will hurt at first, but the pain will go away quickly and then you’ll be done with it.
— Posted by Waiting to be laid off
2007
7:45 pm
Hey Andy (#8): you DO know that Cheney’s daughter works for AOL, right?
— Posted by Eileen