AOL To Cut 1,300 Jobs

The layoffs, which represent 7% of the company's workforce, will primarily impact call center staffers.

Antone Gonsalves, Contributor

May 9, 2006

1 Min Read

AOL LLC, formerly America Online, said Tuesday that it would reduce its call-center workforce by about 1,300 positions, due to fewer calls for support from a shrinking membership.

The layoffs, which represent about 7 percent of the company's worldwide workforce, would take place in the AOL's Member Services division, a company spokesman said. AOL, a division of Time Warner Inc., plans to close its Jacksonville, Fla., customer support center and reduce the number of workers at its Tucson, Ariz., and Ogden, Utah, centers.

AOL has been transitioning from a company of mostly dial-up subscribers accessing a proprietary portal on the Web, to a public portal focusing on entertainment and services to compete for online advertising, a hot multi-billion-dollar market.

The move to the public Web came as the company struggled to hold on to subscribers who were leaving dial-up for broadband services offered by cable and telephone companies. As of March 31, AOL had 18.6 million members in the United States, down from a peak of 26.7 million in September 2002.

Despite the downward trend, AOL spun the layoffs as a result of more stable software, a savvier customer and better online support and self-help tools made available by AOL.

"The world of the Internet is far different in 2006 than in 1996 when we brought on the call centers," AOL spokesman Nicholas Graham said. "People are getting problems solved with a couple of clicks instead of from telephone calls."

With call-center traffic down by half in the last two years, AOL had no choice but to "rebalance" the workforce, Graham said.

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