Turf wars rage at AOL Time Warner

Employees are bracing for a second round of layoffs amid rising tensions and executive infighting.

AOL Time Warner employees are bracing for a second round of layoffs amid rising tensions and executive infighting within the company, sources close to the media giant said. While the company denies "rumors" of additional layoffs, sources say the atmosphere within AOL Time Warner is one of tension and uncertainty.

According to the sources, AOL Time Warner (aol) wants to prove it can meet its financial targets for 2001 and will make up the shortfall from poor advertising sales with additional job cuts.

AOL Time Warner spokesman Ed Adler denied that executives and managers were feuding. When persistently asked about the possibility of additional layoffs, Adler simply denied all "rumors." Sources told MSNBC.com that turf wars and executive infighting have been casting a pall on promises of "teamwork and camaraderie" in the newly combined company.

Any additional layoffs would follow the 2,400 employees who were given pink slips in January, shortly after the AOL-Time Warner merger was finalized.

Since the merger, the work environment inside the company has become increasingly tense, the sources said. The January layoffs were swift and painful, with employees told to clear off their desks and leave immediately, and that their company e-mail accounts would be shut off by 8 p.m.

The possible additional layoffs come amid a dramatic slowdown in advertising across all media. Although AOL Time Warner has been thought to be more protected against a pullback in ad spending because of its revenues from subscription fees and its ability to sell cross-platform deals with major clients, some analysts have become wary about the media giant's ambitious 2001 operating earnings target of $11 billion.

As a result, the AOL Time Warner ad-sales force has been particularly aggressive, in one case pitching an advertising client to increase the amount of money it spends with the online service from less than $1 million a year to over $50 million over the next 5 years, according to one ad agency executive.

Turf battles fought
Meanwhile, executives and managers-thrust together from Time Warner, Turner, AOL, and all the other myriad properties-have been fighting turf wars, trying to carve out their chunk of the new company, sources close to the company said. Those sources said the biggest turf wars have involved Turner executives, who have faced the biggest departmental cuts.

The result has been a political minefield in the company that has many employees throughout the empire on edge, the sources said.

Even before the merger closed, AOL's Steve Case acknowledged widespread rumors about personality and power clashes between AOL and Time Warner executives. During a presentation at the UBS Warburg media conference in December, Case claimed that executives were setting aside their egos in the broader strategic spirit of "teamwork and camaraderie."

"You'll find it'll work remarkably well," he predicted.

But evidence mounts that the team spirit is fading, the sources said.

Music group in disharmony
The Warner Music Group is especially mired in the political turf wars, as many in the company feel it is more vulnerable to change, the sources said. Although it's unclear whether AOL Music has oversight of Warner Music, in January AOL brought in veteran music industry executive Kevin Conroy from BMG, a subsidiary of rival Bertelsmann, to head up its digital music efforts and industry observers expect him to bring in other BMG executives.

Similarly, company reaction to a recent MSNBC.com report that AOL Time Warner plans to launch a cable music channel that would compete with MTV and VH1 also shines light on fractures in the empire's foundation.

AOL Time Warner spokespeople were completely mum on the report, sticking to an official "no comment."

But a spokesperson for Turner Broadcasting Group CEO Jamie Kellner-who is slated to run the new channel-denied the channel's existence. "That's not being considered," Brad Turell, a spokesman for Kellner, told the Atlanta Journal-Constitution. "There's nothing we are working on. Nothing Jamie is working on. There is nothing ready to go."

But sources familiar with the channel say that the denial was not surprising and likely stemmed from internal politics. The company was not ready to announce the channel at the time of the MSNBC.com report. And with layoffs at Warner Music and Time Inc. currently underway-and more layoffs on the horizon-executives might have felt it would seem inappropriate to be seen emphasizing new areas.

Most of the discussion about the cable channel have been very high level among executives in Virginia and New York, and the denial from Turner executives in Atlanta indicated that either the Turner crowd was out of the loop, or making a political statement, sources said.

AOL Time Warner employees are bracing for a second round of layoffs amid rising tensions and executive infighting within the company, sources close to the media giant said. While the company denies "rumors" of additional layoffs, sources say the atmosphere within AOL Time Warner is one of tension and uncertainty.

According to the sources, AOL Time Warner (aol) wants to prove it can meet its financial targets for 2001 and will make up the shortfall from poor advertising sales with additional job cuts.

AOL Time Warner spokesman Ed Adler denied that executives and managers were feuding. When persistently asked about the possibility of additional layoffs, Adler simply denied all "rumors." Sources told MSNBC.com that turf wars and executive infighting have been casting a pall on promises of "teamwork and camaraderie" in the newly combined company.

Any additional layoffs would follow the 2,400 employees who were given pink slips in January, shortly after the AOL-Time Warner merger was finalized.

Since the merger, the work environment inside the company has become increasingly tense, the sources said. The January layoffs were swift and painful, with employees told to clear off their desks and leave immediately, and that their company e-mail accounts would be shut off by 8 p.m.

The possible additional layoffs come amid a dramatic slowdown in advertising across all media. Although AOL Time Warner has been thought to be more protected against a pullback in ad spending because of its revenues from subscription fees and its ability to sell cross-platform deals with major clients, some analysts have become wary about the media giant's ambitious 2001 operating earnings target of $11 billion.

As a result, the AOL Time Warner ad-sales force has been particularly aggressive, in one case pitching an advertising client to increase the amount of money it spends with the online service from less than $1 million a year to over $50 million over the next 5 years, according to one ad agency executive.

Turf battles fought
Meanwhile, executives and managers-thrust together from Time Warner, Turner, AOL, and all the other myriad properties-have been fighting turf wars, trying to carve out their chunk of the new company, sources close to the company said. Those sources said the biggest turf wars have involved Turner executives, who have faced the biggest departmental cuts.

The result has been a political minefield in the company that has many employees throughout the empire on edge, the sources said.

Even before the merger closed, AOL's Steve Case acknowledged widespread rumors about personality and power clashes between AOL and Time Warner executives. During a presentation at the UBS Warburg media conference in December, Case claimed that executives were setting aside their egos in the broader strategic spirit of "teamwork and camaraderie."

"You'll find it'll work remarkably well," he predicted.

But evidence mounts that the team spirit is fading, the sources said.

Music group in disharmony
The Warner Music Group is especially mired in the political turf wars, as many in the company feel it is more vulnerable to change, the sources said. Although it's unclear whether AOL Music has oversight of Warner Music, in January AOL brought in veteran music industry executive Kevin Conroy from BMG, a subsidiary of rival Bertelsmann, to head up its digital music efforts and industry observers expect him to bring in other BMG executives.

Similarly, company reaction to a recent MSNBC.com report that AOL Time Warner plans to launch a cable music channel that would compete with MTV and VH1 also shines light on fractures in the empire's foundation.

AOL Time Warner spokespeople were completely mum on the report, sticking to an official "no comment."

But a spokesperson for Turner Broadcasting Group CEO Jamie Kellner-who is slated to run the new channel-denied the channel's existence. "That's not being considered," Brad Turell, a spokesman for Kellner, told the Atlanta Journal-Constitution. "There's nothing we are working on. Nothing Jamie is working on. There is nothing ready to go."

But sources familiar with the channel say that the denial was not surprising and likely stemmed from internal politics. The company was not ready to announce the channel at the time of the MSNBC.com report. And with layoffs at Warner Music and Time Inc. currently underway-and more layoffs on the horizon-executives might have felt it would seem inappropriate to be seen emphasizing new areas.

Most of the discussion about the cable channel have been very high level among executives in Virginia and New York, and the denial from Turner executives in Atlanta indicated that either the Turner crowd was out of the loop, or making a political statement, sources said.