Another round of layoffs expected
AOL Time Warner is expected to initiate another round of layoffs at its AOL Internet division in Dulles, Va., as early as this week, as the parent company contends with a soft economy and struggles to meet 2001 financial targets.
News reports Monday said hundreds of jobs might be cut, and perhaps as many as a thousand. AOL Time Warner already eliminated 725 jobs at the 15,000-strong AOL division early this year.
That was part of a companywide revamp that shed 2,400 jobs across all divisions following the merger of AOL and Time Warner.
AOL Time Warner shares fell nearly 3% to $42.99 Monday. While Wall Street generally applauds corporate layoffs, at a delicate time like this they’re also perceived as acknowledgment that things are tough and financial prospects uncertain.
The company spooked analysts and investors last month when it failed to meet revenue estimates for the second quarter and said it was unlikely to meet its full-year 2001 revenue target of $40 billion.
AOL Time Warner CEO Gerald Levin has made a point of saying that the company is constantly scrutinizing all of its businesses and would cut jobs where necessary from time to time.