The AOL studios layoffs, first reported by CNET, follow a broad reorganization of the online services company earlier this week that places all operations under Bob Pittman, the former MTV mastermind who was named AOL president under Chairman Steve Case. The reorganization was accompanied by an increase in AOL's monthly service fee to $21.95 from $19.95.
The layoffs suggest that AOL may be just as intent to cut costs as it is to raise revenue through subscription fee hikes. A spokeswoman said the changes stem from AOL's desire to keep all its content initiatives in-house. Formerly, AOL Studios operated somewhat independently from its parent and sought funding in exchange for part ownership from outside companies. That practice will now cease, the spokeswoman said, as AOL Studios is consolidated entirely under AOL.
Among those laid off were about half of the 80 employees working on AOL's high-profile Entertainment Asylum site, whose operations are housed in fancy Los Angeles offices.
Launched late last year both on AOL's proprietary network and the World Wide Web, Entertainment Asylum provides Hollywood gossip, movie reviews, star interviews and more. While AOL claims the site is approaching an impressive 1 million page views a day, it faces daunting competition from the likes of E! Online and Mr. Showbiz.
AOL officials say that most of the site's primary features -- such as its "Screen Team" of movie columnists and reviewers -- will remain intact.
The other layoffs hit AOL Studios' WorldPlay group, a self-branded gaming area on AOL. About 25 of 60 jobs in WorldPlay's Burlingame, Calif., offices were eliminated. And WorldPlay's entire 40-person staff developing a 3-D game environment called CyberPark was laid off as well. AOL has dropped plans to launch CyberPark.
AOL says it remains committed to both Entertainment Asylum and WorldPlay. The latter will be folded into the operations of AOL's popular games channel.
Other AOL Studios sites, such as Electra, Love@AOL and Digital City, were not affected by the cutbacks, the spokeswoman said.