AOL to Cut 20% of Staff

NEW YORK AOL will lay off roughly 2,000 people today, or 20 percent of its staff, as part of an ongoing organizational shakeup at the Web pioneer.

According to a memo issued yesterday by AOL president and CEO Randy Falco, which was obtained by Mediaweek, the company plans to reduce its worldwide workforce of 10,000 by close to 2,000 people. The memo said that this reduction in staff is tied to AOL’s recent reorganization, which saw the creation of the new Platform A division. That unit encompasses several of the company’s ad network businesses, including the recently acquired Tacoda and Third Screen Media. The plan to move AOL’s headquarters here from Virginia is also spurring the cuts.

AOL’s memo was not specific about which sectors of the company will be impacted most by the layoffs. However, Falco did mention that most reductions were aimed at areas of “less growth potential or those that aren’t core to our business.”

And while he did not say any segments would be untouched by layoffs, Falco did list the properties Advertising.com, AOL.com, AOL News, Food, Money & Finance, TMZ, Moviefone and MapQuest as areas of strength. “Our products are once again creating buzz in the market,” Falco wrote.

However, it seems apparent that AOL’s growing footprint is in the ad-network business, rather than its own sites. And ad network efforts may be the top priority going forward. “So where is this taking AOL?” wrote Falco. “Put simply, my vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.”

Falco joined AOL one year ago from NBCU TV Group, where he had been president and COO.