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America Online Plans to Cut 1,200 Jobs

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DULLES, Va. -- AOL Time Warner Inc.'s America Online Inc. announced plans late Tuesday to cut 1,200 jobs as part of a reorganization to "leverage synergies" resulting from the AOL-Time Warner merger and integrate online brands and Web properties.

America Online also said it will eliminate about 500 positions at the Sun-Netscape Alliance.

AOL Time Warner (AOL) expects to take a third-quarter charge of $100 million to $125 million for the moves.

AOL said the reorganization reflects ongoing efforts by AOL Time Warner to operate all of its divisions in a converged, integrated way.

AOL said it will create a new AOL Interactive Services Group, with Jonathan Sacks as president, which will include the flagship AOL service as well as its local Digital City business.

The company also will consolidate its Web brands into a new AOL Web Properties Group, with Jim Bankoff as President. The unit will be comprised of Netscape, CompuServe, Moviefone, MapQuest, ICQ and AOL Instant Messenger services.

AOL will focus on partner service through the Interactive Marketing Group, with Robert Friedman as president. The unit will generate marketing partnerships and sales revenue for all of the AOL brands and properties, as well as the new AOL Time Warner Global Marketing Solutions Group.

"This new organization enables us to stay at the leading edge of the Internet's development and take full advantage of emerging growth opportunities in areas like broadband, online music and home networking," Barry Schuler, America Online's chairman and chief executive, said in a prepared statement. "With the Internet poised to start its next chapter, we are better positioned than ever to deliver valuable new services to consumers and compelling new opportunities to our commerce partners

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