AOL trims staff by more than 700

America Online aims to cut costs as it continues to be courted by Microsoft, Google and others.

Tech Industry
Time Warner's America Online Internet division this week laid off more than 700 employees, or less than 5 percent of its global work force, amid ongoing efforts to cut costs, the company said Wednesday.

Most of the cuts came from AOL's dial-up service operations, the company said.

AOL, which is currently being courted by Microsoft, Google, Comcast and Yahoo for a possible investment and joint venture, shut down its Orlando, Fla., call center, and trimmed jobs in other areas, including the division's corporate headquarters in Dulles, Va.

"As a result of this structural and strategic transformation, AOL is better positioned to remain flexible, nimble and competitive in the market, enabling us to expand existing audiences and reach new ones online," said Nicholas Graham, an AOL spokesman.

Once the object of scorn at corporate parent Time Warner, AOL has emerged as the center of attraction for a party of top Internet companies seeking to cement their market position.

Over the past year, the company has sought to exploit the explosive growth of online advertising by making more of its programming and services freely available on the Internet.

It won high praise for its online broadcast of the Live 8 concerts for aid to Africa, with viewer numbers that handily beat cable and network television broadcasts of the event.

The company declined to specify cost savings that would be achieved with the recent round of cuts, or the impact from severance.

One source familiar with the actions said the charges would be booked during Time Warner's fiscal fourth quarter.

Story Copyright © 2005 Reuters Limited. All rights reserved.

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