New York — Since its recently announced voluntary layoff program that fell short of its goal late last year, US Internet company Aol Inc., on Monday said that it will begin the process of giving out pink slips to around 1,200 to 1,400 employees and said it would close some European offices, to meet a target of trimming one-third of its global workforce.
The Internet pioneer, which was turned out from media giant Time Warner last month after a strained merger, announced in November that it planned to trim its work force by about one-third, cutting up to 2,500 positions.
The company then said that it would take a 200-million-dollar charge as part of a restructuring as it regained independence. But yesterday, Aol said that about 1,100 employees accepted a buyout package, offered in December and aimed at cutting some 2,300 jobs and that this week it would begin laying off another 1,200 more workers.
“We had around 1,100 employees opted to accept the voluntary program…. We did not reach that target,” Alysia Lew, an Aol spokeswoman, said in a statement.
Lew remarked the involuntary layoff process varies by country internationally and is subject to local laws. She said Aol began meeting with employees Monday throughout Europe, including in Britain, Germany and France.
“We announced plans to shut down many of our offices in Europe, beginning with those in Spain and Sweden,” she said.
Volunteers who accepted program were compensated with three to nine months’ pay and other benefits, depending on rank, according to a person familiar with the situation. Employees who are laid off involuntarily will receive a package of one to four months’ pay and other benefits, this person said.
The Internet company is now trying to complete its transition from a subscription-based service for connecting to the Internet to an ad-supported digital media company. Aol is pushing to become a top producer of news, entertainment and other digital content.
Aol said it started sending notification to affected employees in the United States on Monday and that the majority of employees would be laid off by Wednesday.
Aol needs to restructure its business to compete in the online advertising market against the likes of Microsoft Corp., Google Inc., Yahoo Inc. and others, analysts said. After the cuts, Aol will have about 4,700 employees, or less than one-quarter than it employed at its peak in 2004, when it had some 20,000 workers.
However, the scheduling of the layoffs will vary in other countries that are subject to different labor laws, the company said. Trish Primrose, an Aol spokeswoman, declined to say how many of the affected employees were in the United States.
The layoffs covers a major cost-cutting campaign, internally known as Project Everest, that was initiated by Tim Armstrong, the former Google sales executive who became chief executive of Aol last year. Armstrong has said he would pare back Aol’s business and focus the company more narrowly on a few areas including content, online advertising and communications.
“Project Everest is the completion of phase one of Aol’s turnaround,” Ms. Primrose said in an e-mail message.
The layoffs are an attempt to cut annual costs by about $300 million. Aol expects to incur as much as $200 million in restructuring charges.
“We have assessed every aspect of this business. We measured 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,” Primrose said.
“All of our cost alignment work is about ensuring Aol’s sustainability and future success,” she added.
Aol, formerly known as America Online, became a separate traded company on December 10.