Bloomberg News

AOL Cutting as Many as 40 Employees as Executives Depart

March 09, 2012

AOL Inc. (AOL) is firing as many as 40 people in the group that includes its AOL Instant Messenger service, while executives Eric van Miltenburg and Jason Shellen depart, three people with knowledge of the matter said.

David Tempkin, who now runs the mobile group, will become head of the consumer applications division, which includes mobile, AIM, e-mail and about.me, an online profile application, said the people, who asked not to be identified because the changes haven’t been announced. He replaces van Miltenburg, they said. Shellen was head of AIM, the instant messaging service.

AOL, based in New York, has 5,660 employees and is trimming costs amid declining sales. AIM’s staff cuts are related to the division’s underperformance, the people said. AOL, led by Chief Executive Officer Tim Armstrong, could eliminate more staff in other departments, these people said.

Last year, the company combined the dial-up Internet access business with Web services, including AIM, into a new group reporting to Chief Financial Officer Arthur Minson.

That arrangement indicated that AOL wanted to impose fiscal discipline on the unit, Clayton Moran, an analyst at Benchmark Co. in Delray Beach, Florida, said in December.

Thing Labs

Shellen joined in September 2010 when AOL bought Thing Labs Inc., a startup that creates applications that work on Twitter Inc. and Facebook Inc. Van Miltenburg, a former Yahoo! Inc. executive, joined AOL in 2009.

“We are making some strategic, but very difficult changes to better align our resources with key areas of growth for us as a company,” Maureen Sullivan, a spokeswoman for AOL, said in a statement. “We remain committed to our presence in Silicon Valley and driving innovation in consumer products and mobile.”

News Corp.’s AllThingsD technology blog earlier reported the cuts.

Other AOL managers who have left the company in recent months include technology executive Alex Gounares, whose departure was announced last month. 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 rose less than 1 percent to $17.70 at the close in New York. The stock has gained 17 percent this year.

To contact the reporters on this story: Douglas Macmillan in New York at dmacmillan3@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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