Tech Industry

AOL lays off 80 at Digital City

America Online is laying off 80 workers at its Digital City guides, the third round of company cuts in recent weeks, CNET's NEWS.COM learns.

America Online laid off 80 employees at its Digital City guides, marking the third round of staff cuts at the online service in recent weeks, CNET's NEWS.COM learned today.

Citing redundancy in many positions, AOL laid off 24 employees in the corporate office and 56 others spread out over the 32 cities where it operates its Digital City guides. The sites provide regionally specific information such as entertainment listings in an effort to draw local advertising dollars.

The Digital City cuts follow layoffs ordered at Local guides look to long term AOL earlier this month. The company let go half the staff of its four-month-old Entertainment Asylum site, as well as most of those who report to its WorldPlay interactive games unit.

AOL spokeswoman Ann Brackbill said today that more than half of the 50 or so people laid off at Entertainment Asylum, have found jobs within the company. AOL will try to find Digital City people jobs, but many of the people are located in the cities for which they work and will not want to move.

AOL is not the only local content service to have seen layoffs in the highly competitive market. Microsoft also laid off employees of its service, Sidewalk, also citing staff redundancies.

City guides are engaged in one of the hottest battles on the Internet. Companies launch new sites almost daily and are competing for what analysts say are billions of dollars in local advertising revenues. AOL is one of the forerunners, but it has not even come close to winning the war.

The targeted Digital City employees got their pink slips yesterday, Brackbill said. About 210 people will remain employed in the Digital City chain.

The job cuts are an outgrowth of the company's reorganization. On February 9, along with a $2 monthly price increase, the company announced that it would be folding AOL Studios, including Digital City, into the main unit.

The employees targeted were "primarily folks where there were redundancies in the infrastructure," in advertising sales, financial services, and administration, Brackbill said. She added that some of the Digital City operations, such as Atlanta and San Diego, operate from regional hubs in Washington and Los Angeles.

"We have to be flexible and nimble and keep an eye on the markets," Brackbill said.

She said the reductions should not be viewed negatively. In fact, she said, Digital City will be hiring more people in other areas. Microsoft has said the same of its Sidewalk operations.

"Digital City has been incredibly successful for us," she said. "It's something we're looking ultimately to expand. This is related very much to taking advantage of the infrastructure and restructuring the entire company."

Brackbill added that the Washington and Los Angeles sites are profitable, and she expects New York, launched earlier this month, to follow.