AOL told its employees today that it will lay off 10 percent of its workforce - roughly 700 people - to help the company work through the recession. The reductions should be complete by the end of March and a consolidation of groups within the company are expected to follow. Merit raises also have been eliminated.
The news was first reported on the Boomtown blog, which has also posted the full text of the e-mail to employees. In it, CEO Randy Falco told employees:
Reducing our workforce is never easy, particularly in the current climate, but our goal in doing this is to provide our core businesses the resources they need to thrive. Please know that, as always, we'll be doing everything we can to help and support those affected, including offering severance packages and other services.
In the memo, Falco said that online marketers have "tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars." AOL's declining ad revenue has been weighing down parent company Time Warner.