AOL to Cut 5,000 Jobs

New business strategy starts with 26 percent reduction in workforce.
Just a day after AOL's parent company, Time Warner, announced AOL was shifting its focus from subscription-based revenue to advertising supported broadband services, AOL said it plans to cut 26 percent of its workforce over the next six months.

CEO Jon Miller alerted employees of the pending cuts during a company-wide meeting Thursday, AOL spokesperson Trisha Wallace told

Most of the job cuts are expected to be in AOL's dial-up customer support and services.

As of June 30, AOL counted 17.7 million U.S. subscribers, a decline of 976,000 from the prior quarter and 3.1 million from the year-ago quarter.

As a result, AOL revenues declined 2 percent ($51 million) to $2 billion because of an 11 percent decrease ($188 million) in subscription revenues.

The subscription revenue still generated $1.5 billion during this year's first quarter, but Time Warner President and COO Jeff Bewkes promised that cutting the slowing ISP business would mean $1 billion in savings by 2007.

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