AOL ‘Significantly Reducing UK Staff’; Closing Sweden, Spain, Germany, Paris

By Mark Sweney: AOL (NYSE: AOL) has moved to shut down many of its European offices after failing to reach a target of cutting one third of its worldwide workforce through voluntary redundancy.

The UK operation would see a “significant reduction” in staff numbers, the company said. It announced plans in November to cut 2,500 jobs across the world, with the aim of saving $300 million a year, and about 1,100 employees have taken voluntary redundancy. More than 1,000 further job cuts are therefore expected across the US and Europe.

We will be significantly reducing our UK staff, but will continue to have a robust advertising operation as well as a consumer offering,” an AOL spokesman said in a statement.

Ireland will remain a core technology development centre for the company. Both the UK and Ireland were part of the voluntary separation programme we ran late last year. Regarding Bebo, it continues to be part of AOL Ventures.”

AOL UK would not give a total employee count or the number it expects to cut.

The company said that meetings were held across its European operation yesterday about cutbacks and the closure of “many” offices, starting with those in Spain and Sweden. Four German offices will close, in Hamburg, Dusseldorf, Frankfurt and Munich. In France the company has considered a number of options and intends to consult on closing its Paris office.

The AOL spokesman stressed that successful operations, such as the advertising business AdTech, would continue to have offices in Europe.

In the USA the company said that it will ” begin notifying a limited number of individuals impacted by the involuntary layoff… with the majority of notifications taking place in the USA on January 13.

“For many of the employees impacted in the USA Wednesday will be their last day in the office,” the company said.

AOL also said that it was closing its Seattle office, home of some of its mobile operations, with the mobile division to be centralised in California.

AOl has said that the restructuring programme will see it take a $200 million charge this year.

“We have looked at every aspect of this business,” said a spokesman for AOL. “We evaluated our competitive position and product portfolio in every market, and we asked the hard questions about areas that were no longer core to the strategy and our profit profiles in the businesses and countries where we operate.”

The company had approximately 6,900 employees before the restructuring, of whom about 4,500 were in the US. AOL was spun off from its former parent group, Time Warner (NYSE: TWX), in December.

This article originally appeared in © Guardian News & Media Ltd..