AOL Time Warner lays off 2,000 employees
Published: 24 Jan 2001 10:17 GMT
AOL Time Warner laid off about 2,000 employees Tuesday, according to a source familiar with the action, bringing total cuts at the newly merged company to 2,400.
The layoffs account for 3 percent of the company’s total premerger work force of 85,000, including 400 cuts announced last week at the company’s CNN subsidiary.
AOL Time Warner has been reviewing its business units and planning layoffs to reach its goal of increasing earnings by $1bn to $11bn, excluding certain costs, in the next year.
As previously reported, the divisions expected to be hit hardest included Warner Brothers Online, which had plans on the table since at least last week to shutter its Entertaindom content hub.
Fears that cuts might slice into creative divisions having no overlap with AOL were realized Tuesday as the company cut deeply into its New Line Cinema division, laying off 100 of 600 employees, according to a source familiar with the decision. New Line Cinema has produced some notable failures, racking up losses on at least one recent film, Little Nicky.
One source at New Line Cinema confirmed that between 100 and 120 of the unit's roughly 600 employees had been laid off today.
"Everyone was shellshocked," the employee said. "The ones who survived felt guilty, and the ones that got laid off felt like hell."
Cuts ranged from upper management to file clerks and hit creative, development, and marketing hardest, the source said.
An AOL Time Warner spokesman declined to comment on the layoffs late Tuesday.
The company plans to meet with analysts on Jan. 31 to discuss its outlook for the coming year. Although the star for Internet stocks and businesses has fallen dramatically, AOL Time Warner executives have so far stuck by their earnings growth estimates.
It was unclear late Tuesday whether additional cuts are on the table.
According to published reports, AOL’s Internet service will lose 725 positions, Warner Brothers Online will lay off 100, Time will cut 400, Warner Music will drop about 600 jobs, and about 100 overlapping AOL and Time Warner corporate positions will also be eliminated.
The cuts will not affect HBO, Time Warner Cable, the WB Network and Turner Broadcasting, aside from 400 previously announced layoffs at CNN.
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