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Pinkslips abound at AOL unit

Dulles office to shed about 1,200 jobs

AOL Time Warner’s America Online unit Tuesday announced 1,700 layoffs as part of a restructuring to more tightly integrate its online brands and web properties.

The revamp calls for the Dulles, Va.-based AOL to shed about 1,200 positions, with another 500 jobs cut at the company’s Sun-Netscape Alliance. As a result, parent AOL Time Warner will take a charge of $100-$125 million in the current third quarter.

Upcoming layoffs at AOL have been rumored for weeks. The number was on the high side, however, as reports had put job cuts at anywhere from several hundred to 1,000. Parent AOL Time Warner laid off 2,400 employees across all divisions earlier this after its merger closed.

The revamp, aimed at streamlining AOL and exploiting synergies with its parent, include:

  • Creating a new AOL Interactive Services Group with Jonathan Sacks as prexy;

  • Consolidating AOL’s brands, like Netscape, CompuServe, Moviefone and MapQuest, into a new AOL Web Properties Group with Jim Bankoff as prexy;

  • Creating a new Vertical Markets Group as part of AOL Interactive Services, with Donn Davis as prexy.

Getting the various pieces of its wide-ranging empire to work, and earn, together has become a guiding principle at AOL Time Warner. Last Friday, the company announced the creation of an AOL Time Warner Global Marketing Solutions Group.

Hit by a slow economy and advertising market, the conglom is also hard pressed to cut costs and boost revenue in order to meet Wall Street’s financial expectations.

AOL said in June its membership topped 30 million.

AOL Time Warner shares fell 0.77% to $39.90.

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