AOL Trims 1,300 Jobs

May 9, 2006  •  Post A Comment

Time Warner’s AOL unit is laying off around 1,300 employees-7 percent of its workforce-as the online service continues to see significant declines in dial-up customers.

Most of the job cuts will be made at AOL’s call centers, with one center in Jacksonville, Fla., shutting down completely, an AOL spokesman confirmed Tuesday. Other cuts will come from call centers in Ogden, Utah, and Tucson, Ariz. The staff cuts follow the elimination of 700 call-center jobs last September.

While he acknowledged the decline in dial-up subscribers, spokesman Nicholas Graham said AOL management believes the layoffs are a reflection of a 50 percent decline in customer-service calls since 2004. The decrease in calls, he said, is due to a more technologically savvy subscriber base, as well as a number of self-help tools available online, which allow subscribers to solve problems without having to call a customer service representative.

“We have empowered members to solve with a couple of clicks what used to take a couple of phone calls,” Mr. Graham said.

AOL had 18.6 million dial-up subscribers at the end of the first quarter, down 14 percent from a year ago.

The layoffs are the latest in a string of difficulties at AOL, which has been rocked in recent years by a steady decline in its dial-up service as more consumers switch to high-speed Internet providers. Restoring AOL’s luster is a top priority for Time Warner Chairman and CEO Richard Parsons. He thinks AOL can survive if it relies more on advertising revenue, allows nonmembers to access features and services previously reserved for AOL members and introduces new products such as In2TV, a Web site offering broadband delivery of classic television series such as “Welcome Back, Kotter.”