The job cuts amount to about five percent of the company's 5,900-strong work force. About two-thirds of the people who received pink slips yesterday work in AOL's four Northern Virginia offices. The rest are casualties of the company's decision to close its Global Network Navigator (GNN) operation based in Berkeley, California, and the Vero Beach, Florida, content development office.
The company will transfer the GNN Internet service subscribers to AOL. It bought the operation less than two years ago for $11 million.
In a November 12 letter to employees, AOL's chief executive Steve Case called the staff reductions one of the "painful aspects" of changes that will consolidate the online service into three divisions.
"The bottom line is that the company has moved forward to implement a number of staffing changes that are necessary to align our workforce with the new organization," Case said in the letter. He added: "We aren't slowing down our aggressive plans for continued growth."
A company representative was quick to stress AOL's plans to add between 1,000 and 1,500 new jobs by June 1997 as it expands customer support, technology development, sales, and marketing units. As part of the expansion announced two weeks ago, AOL recently opened a customer call center in Albuquerque, New Mexico.
"This is not downsizing," said company representative Pam McGraw. "We continue to grow across the board."
Even with the firings, AOL added nearly 3,000 jobs in 1996, as it passed the 7-million member mark earlier this month.
The company will take a previously announced $75 million dollar charge in the second quarter as a result of the restructuring. The charge will include severance pay costs, McGraw said.