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Layoffs at AOL content units

Half the staff of AOL's Entertainment Asylum site is let go, along with most of those who report to its WorldPlay interactive games unit.

America Online (AOL) has laid off 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, CNET's NEWS.COM learned today.

The job cuts--105 people in total--are part of a plan to fold AOL Studios, previously a separate operation, into the rest of the company, a restructuring that was announced Monday. The layoffs all occurred yesterday, company spokesman Pam McGraw said.

AOL said it remains committed to providing content along with connectivity for users. It also said Entertainment Asylum remains a "successful property, reaching 1 million page views a day in just a few short months."

The company made industry waves this week in announcing it is planning to raise rates for unlimited Net access by 10 percent to $21.95 per month, effective in April. It also reported better-than-expected results for the second fiscal quarter and its stock is trading at historic highs. (See related coverage)

McGraw was confirming a rumor, sent via email, that AOL Greenhouse chief creative officer Charlie Fink visited the Culver City, California, offices of Entertainment Asylum and informed workers that "50 percent of the staff would be let go."

According to McGraw, 40 people were let go from Entertainment Asylum and 40 will remain. Entertainment Asylum was launched in October both on AOL's proprietary network and the Web. It resulted from the work of online interactivity pioneer Scott Zakarin and late entertainment executive Brandon Tartikoff.

Zakarin, creator of the Web soap opera "The Spot," was among those let go, along with some others who came to AOL from the "Spot" team, AOL confirmed.

The layoffs at WorldPlay affect 25 of about 60 workers at its Burlingame, California, office. In addition, all 40 people who were working on WorldPlay's 3D gaming project, dubbed CyberPark, in Oakhurst, California, were let go and CyberPark was canceled.

Last June, WorldPlay rolled out a per-play plan for interactive games, which caught on throughout the industry but drew fire from some users. In September, Kesmai, a subsidiary of Rupert Murdoch's News Corporation, filed suit against AOL, charging "flagrant violation of antitrust laws" in online gaming by WorldPlay. AOL denied the charges.

AOL previously had bought ImagiNation Network and relaunched it in June under the WorldPlay name.

McGraw said "no announcements have been made" about cutbacks at its other content properties, including Electra, a site for women; RealFans, a sports site; or Love@AOL, a romance site.