America Online is planning a round of layoffs at its interactive marketing department this week in a major step to overhaul and cut costs at the troubled Internet service provider.
Slipping ad revenue at AOL has weighed on the unit and squeezed the profits and share price of its parent, AOL Time Warner. AOL TW chief operating officer Robert Pittman took AOL’s helm last month. He appointed a number of new managers, including Jimmy De Castro to head America Online’s Internet service and Robert Sherman as head of interactive marketing, a division with about 700 employees. As many as 100 jobs may be cut.
AOL has laid off close to 2,000 people since the merger with Time Warner was announced.
Incoming AOL TW CEO Richard Parsons has made reinvigorating America Online one of his top priorities. Parsons officially took the reins at the giant media conglom last week.
AOL stock, which has been battered in recent months, perked up over the past few sessions. It jumped 5.7% to $19.98 on Friday as investors were heartened by new management and a strengthening ad market. They may also have smelled a bargain — the shares had recently slipped to below $17 from a 52-week high near $60.