AMERICA Online cuts 1,200 jobs in second wave of cuts since merger with Time Warner

Wednesday, August 22nd 2001, 12:00 am
By: News On 6

NEW YORK (AP) _ America Online is eliminating 1,200 more jobs, or 8 percent of its work force, as the unit reorganizes, copes with an advertising downturn and integrates with the rest of AOL Time Warner Inc.

An additional 500 jobs are being cut at iPlanet, a software maker that AOL co-owns with Sun Microsystems. IPlanet employees 3,000 people, making the cuts there equivalent to 17 percent of its work force.

It was the second wave of job cuts at AOL since its merger with Time Warner closed in January.

Barry Schuler, chief executive of America Online, said the revamp would split AOL into two main units, one focusing on AOL's Web brands, such as Netscape and CompuServe, and another focusing on the AOL service.

Schuler said the revamp was driven mainly by a need to streamline, but also to integrate the unit with the rest of AOL Time Warner and to respond to a slower market for online advertising.

AOL cut 725 positions in January as part of a companywide shake-up that cost more than 2,000 jobs.

Steve Weinstein, senior research analyst with Pacific Crest Securities of Portland, Ore., said AOL had done well under ``incredibly difficult'' circumstances.

``This is probably the worst advertising environment in 20 years,'' Weinstein said. ``It's amazing we didn't see this pain earlier.''

The cutbacks will result in a charge against earnings of $100 million to $125 million in the third quarter, the company said late Tuesday.