AOL to Cut 25% of Workforce

Expect More AOL Workforce Cuts

If you think a Michael Arrington rumor holds any weight, you’ll guess (correctly) that AOL is becoming more screwed by the minute. In the followup post to his news that might be shut down, Michael claims might redirect to instead, which in turn might become the AOL domain name to increase page views (supposedly as high as 3 million a month as it stands.)

If you’ve checked since Michael wrote that, you know there is no redirect; in fact, the subdomain was deleted (just as I wish it’s parent would be).

Michael also writes of upcoming layoffs at AOL:

We also expect to hear about material layoffs at AOL in the next six weeks, possibly as much as 15% of the 16,000 strong workforce. Next week the senior execs are supposed to be notified…

An “AOL employee” adds:

AOL employee

Layoffs are actually likely to be higher than 15%, the number floating around Dulles is that it’ll be closer to 25%.

25%. That is, for the math-unenabled, one-quarter of AOL’s remaining workforce. If you’ve paid attention to what I’ve written, you know AOL’s workforce was decimated last year, that all of their call centers (except one, possibly in Utah confirmed in comments–it’s in Phoenix, AZ) have been outsourced or shipped to India, and that workforce “cuts” have reached as high as upper-level management. Where can the ax possibly fall this time? Take your best guess.

Update: Bloggers are so slow on AOL news these days unless it’s along the lines of a Vinnie Ferrari or an AOL Data Leak. Michael Arrington was the first person to break the news; I was the first person to repeat it; finally, everyone else is jumping in on the act. Henry Blodget has some good breakdowns and a spreadsheet on why and how the cuts are being made and who might be affected. There’s also a priceless comment on his first post by “Sal”:

If they are looking to preserve operating income, they should nix the Tacoda deal where they are paying $275 million for their “supposed” patent pending behavioral targeting technology platform. Turns out that the intellectual property they are trying to pass off as their own to AOL is owned and patented by a small Arizona based company named Modavox (MDVX) trading at a tiny $60 million market cap while owning numerous patents covering the technology.

There’s a quick way for AOL to save $275 million and increase that operating income!

More information about that lawsuit is here and it serves AOL right.

I disagree with Henry Blodget when it comes to Q4. Q4 is it; the end of the line. If some miracle doesn’t occur by then, my bet, based on nothing, don’t use me for financial advice, etc. etc., is AOL is finished. Dissolved. Done.