AOL staff on chopping block: is anyone surprised?


I saw the headline and yawned. OK, I'm overstating. But was it a surprise to me -- or anyone -- that AOL is planning big staff cuts in conjunction with the company's much-ballyhoed free AOL email offerings? Hardly. Staff cuts in May were seen as only a small piece of an ongoing puzzle as AOL changes from a dial-up, ISP, customer service-based business to a content-rich advertising-based model.

Sure, 5,000 employees, a quarter of AOL's worldwide workforce, is a lot of people. And no one likes job losses. Except maybe investors, who should be pleased -- customer service isn't cheap and the focus is on cash flow or, as Time Warner likes to call it, OIBDA. Should be, but weren't. Although the stock sank only a few pennies today, to $16.65, TWX was down another 17 cents in after-hours trading on the news.

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