AOL to cut 20 percent of global workforce: source

Reuters News
Posted: Mar 21, 2011 2:30 PM

By Kenneth Li and Supantha Mukherjee

NEW YORK/BANGALORE (Reuters) - AOL Inc will cut more than 900 jobs, or 20 percent of its global workforce, as it struggles to catch up to faster-moving rivals, a source close to the Internet company said on Thursday.

AOL, which has 5,000 workers, will cut about 400 jobs in India, outsource another 300 there, and eliminate 200 jobs in the United States, the source said.

The cuts come after AOL, which was spun off from Time Warner Inc in 2009, unveiled the latest in a string of purchases. It struck a deal to buy The Huffington Post news and commentary website for $315 million.

Arianna Huffington, the high-profile liberal pundit and founder of the influential website, takes over AOL's editorial operations as part of the deal.

In India, 300 jobs will be transferred to contractors MindTree Ltd and Hewlett-Packard Co, another source told Reuters.

In the United States, AOL aims to cut jobs in the media and content-production areas, leaving advertising sales and network operations positions untouched, according to the source reporting the 900 job cuts.

The source said the company planned to bolster the ranks of its full-time journalists and move away from a reliance on freelancers.

Through the global economic recession, AOL prided itself as one of the biggest recruiters of out-of-work journalists as a severe decline in advertising revenue in the newspaper industry wiped out newsrooms across the United States.

(Additional reporting by Jennifer Saba; editing by John Wallace)