The company is offering buyouts to about 2,500 members of its workforce as it seeks to trim its employee headcount by nearly a third over the next few months. The once high-flying company and its nearly ubiquitous online greeting -- "You've Got Mail" -- still has several vibrant features and the company believes it will be in a better position to exploit them as a standalone operation.
The company's new brand identity is scheduled to be fully unveiled on Dec. 10, one day after it formally becomes an independent company "committed to creating the world's most simple and stimulating content and online experiences."
Millions of Americans cut their eye teeth on AOL's dialup and e-mail service, but after it merged with Time Warner in 2000 at the height of the tech bubble in a multibillion dollar transaction -- said to be the largest merger in U.S. history -- the company began losing traction almost immediately. Even AOL's former chairman Steve Case called for AOL to be split off from Time Warner after it became evident the merger was a failure. Since Jan. 10, 2000, the day the merger was announced, Time Warner stock has slipped from $184 a share to $42.
AOL's chief executive Tim Armstrong announced the latest layoffs last week. The firm is now headquartered in New York, but maintains a major operation in northern Virginia in suburban Washington D.C. A former advertising chief at Google, Armstrong has led a series of pep talk sessions at AOL in recent months and has said he will decline a bonus this year.
The merger has been a bonanza for Steve Case, who has thrived on his spoils from the merger. Last week, his Revolution Money online payments company was acquired by American Express for about $300 million.