AOL is looking to shed more than one-third of its nearly 7,000 employees to cut costs.
The Internet company, founded in Northern Virginia, is asking 2,500 employees to take voluntary buyouts, which will be available from Dec. 4 to Dec. 11. AOL will begin to fire employees if enough employees do not volunteer,according to spokeswoman Tricia Primrose.
The online company, famous in the 1990s for its dial-up Internet business, employs about 2,400 workers in Northern Virginia, where it maintains its Dulles campus in Loudoun County.The company’s corporate headquarters moved to New York from the Dulles campus in spring 2008.
About 650 employees work in New York, according to Primrose. The cuts are the latest in a series in recent years — AOL employed more than 20,000 workers as recently as 2004.
With the company struggling for years to shift its business model to adapt to the ever-changing Internet,the bad news was not a big surprise, said Tony Howard, president and chief executive of the Loudoun County Chamber of Commerce.
“My heart absolutely goes out to those folks,” Howard said. “That’s always heartbreaking.”
“What’s important is that this company, a flagship Loudoun County company,” will continue to move forward, he added.
AOL is set to spin off from Time Warner on Dec. 9. In 2001, AOL Inc. merged with Time Warner Inc., a move largely seen as a disaster for both companies. The buyout program will be contingent on the spinoff and will be subject to approval by the company’s board of directors.
Earlier this year, federal contractor Raytheon Corp. announced a deal with AOL in which it would lease space in four office buildings at AOL’s Pacific Corporate Park in Dulles.
AOL Chief Executive Tim Armstrong told employees in an e-mail that he would forgo his 2009 bonus. Armstrong earns at least $1 million a year in salary, according to documents filed with the Securities and Exchange Commission.
“That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees,” he wrote.
