Bloomberg News

AOL Is Said to Plan California Job Cuts Including at AIM Messaging Service

March 02, 2012

AOL Inc. (AOL), the Internet company that owns the Huffington Post news website, plans to cut jobs, including workers at its AIM instant-message service, according to two people familiar with the matter.

The firings will focus on technology teams in the company’s Palo Alto, California, office, said the people, who declined to be identified because the plans haven’t been made public. The decisions on who and how many employees will be cut aren’t yet final, the people said. Less than 100 workers will be affected, one person said.

AOL, with 5,660 employees, is trimming costs amid declining sales. Last year, it combined its dial-up Internet access business with Web services, including AIM, into a new group reporting to Chief Financial Officer Arthur Minson. That arrangement suggested that the New York-based company wanted to impose fiscal discipline on the unit, Clayton Moran, an analyst at Benchmark Co. in Delray Beach, Florida, said in December.

Jason Shellen, who runs AIM, may seek a buyout in the next few weeks, two people familiar with the matter said. Shellen joined in September 2010 when AOL bought Thing Labs Inc., a startup that creates applications that work on Twitter Inc. and Facebook Inc.

Maureen Sullivan, an AOL spokeswoman, declined to comment, as did Shellen.

Executive Departures

Other AOL managers who have left the company in recent months include technology executive Alex Gounares, whose departure was announced this week. TechCrunch editor Erick Schonfeld also said he is leaving to pursue other opportunities. Brad Garlinghouse, who ran the applications and commerce group, stepped down last year.

AOL is planning to eliminate hundreds of jobs next week, including at its Patch local Internet unit, technology news website PandoDaily reported on Feb. 29, without saying where it got the information. The Wall Street Journal reported yesterday AOL was cutting staff at AIM.

The company had 1,410 workers related to Patch at the end of 2011, according to a filing. AOL has no plans to sell or spin off any part of its business, Chief Executive Officer Tim Armstrong said in December. The reorganized structure was meant to encourage users with AOL accounts to use more of its Web services, such as e-mail and AIM, he said at the time.

AOL shares rose less than 1 percent to $18.09 at yesterday’s close in New York. The stock has gained 20 percent this year.

To contact the reporters on this story: Edmund Lee in New York at; Douglas MacMillan in San Francisco at

To contact the editor responsible for this story: Tom Giles at

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