AOL Layoffs Follow Voluntary Job Cuts
AOL says 1,100 people took voluntary job elimination packages in December 2009, not the 2,500 people the company had hoped for. As a result, AOL says layoffs are necessary to help reach its goal of saving $200 million. Other efforts include the closing of offices internationally; at least two will shortly be shut down in Sweden and Spain.AOL is pursuing its transition to being a more content- and media-driven company by restructuring its work force, something that has openly been in the works since the company asked for volunteers to take job elimination packages in December 2009. On Jan. 11, AOL began laying employees off in small numbers, but layoffs will steadily increase over the week with the bulk expected to come on Jan. 13, reports Silicon Alley's The Business Insider. A total of 1,200 to 1,400 employees are expected to be let go this week, said various reports.
According to AOL, 1,100 people accepted the packages in December, but that wasn't enough to help reach its goal of saving $200 million. The company had wanted the number of voluntary layoffs to reach 2,500, but not enough employees stepped forward, hence the cuts now. Other efforts include the closing of offices internationally; at least two will be shut down this week in Sweden and Spain.
"We will begin notifying a limited number of individuals impacted by the involuntary layoff today, with the majority of notifications taking place in the U.S. on Wednesday," an AOL spokesperson told The Wall Street Journal. Employees are being offered severance with a minimum of one month's pay, while those who took the voluntary package in December received anywhere from three to nine months severance, reported The Washington Business Journal.
So, what will happen to AOL next? Media specialist company PaidContent.org speculates:
Here is the AOL memo about the layoffs:
"In November, we
announced that the company would take a $200 million charge and that we planned
to decrease the size of our global workforce by one-third. Late last year, we
offered [the] Voluntary Separation Program to enable employees to decide what
was in their best personal and professional interest. We had approximately 1,100
employees opt to join the Voluntary program. At [the] time we announced the
Voluntary program we noted that if we didn't reach our target reduction of a
third we would need to follow the voluntary program with an involuntary action.
We did not reach that target.
The next phase of our
restructuring plan will include an involuntary layoff. Our process
internationally varies by country and is subject to local laws. We began
meeting with employees throughout Europe today.
For example, meetings have already taken place in the UK, Germany and France, and we announced plans to shut down many
of our offices in Europe, beginning with those in Spain and Sweden. In addition, we will be beginning the
consultative process with the Workers' Councils in relevant countries this
In the United States, we will begin notifying a limited number
of individuals impacted by the involuntary layoff today, with the majority of
notifications taking place in the U.S. on Wednesday, January 13. As of this point,
this layoff will not trigger the Worker Adjustment and Retraining Notification
Act (WARN) in any of our locations. For many of the employees impacted in the U.S., Wednesday will be their last day in the
Since April, we have
been moving through a process that started with strategy, then focused on
structure, and has most recently been centered on aligning our costs with the
company's strategy and structure. As a part of this process, we've looked at
every aspect of this business. We evaluated our competitive position and
product portfolio in every market-and we asked the hard questions about areas
that were no longer core to the strategy and our profit profiles in the
businesses and countries where we operate.
We will be offering
packages to impacted employees in the U.S. that will include severance, benefits and
outplacement assistance, among other things.
All of our cost alignment work is about ensuring AOL's sustainability and future success. Project Everest is the completion of phase one of AOL's turnaround.