In the wake of minor layoffs this week, AOL has officially acknowledged that it plans to drop the Ax -- with a capital "A" -- which will result in up to $200 million in restructuring charges
through the first half of 2010. The figure, revealed in a filing
with the Securities and Exchange
Commission on Thursday, is being associated with an estimated 1,000-to-1,500 looming job cuts at the soon-to-be-independent company.
"All told, it sounds like the cuts would amount
to about 1,500 employees, depending on the size of the buyout," Henry Blodget said
prior to the
emergence of the SEC filing. "While you never want to root for more cuts, we just hope Tim [Armstrong] cuts deep enough that he and AOL never have to do this again."
As Reuters notes
, "AOL said the charges relate to 'additional restructuring activities' but did not elaborate
Through the first 9 months of this year, AOL has already spent $82.9 million on separate restructuring efforts, while parent company Time Warner has said it will spend
$100 million on its restructuring/mass layoffs at its Time Inc. publishing unit.
In late May, Time Warner's board of directors authorized plans to spin off AOL as an independent,
publicly traded company by the end of the year.
"Shortly after the spin-off, we plan to undertake additional restructuring activities to more effectively align our organizational
structure and costs to our strategy," AOL said in the SEC filing. We are also evaluating the countries in which we operate as part of the effort to align our cost structure, and we may decide to
cease or reduce operations in certain countries ... In connection with these additional restructuring activities, we expect to incur additional restructuring charges of up to $200 million,
substantially all of which is expected to be incurred from the date of the spin-off through the first half of 2010."
"What this means is there are lot more layoffs to
come," writes paidContent
. "About 1,000 of AOL's roughly 6,000-member workforce
could lose their jobs by the time the staff reductions are done, according to estimates."
Earlier this week, AOL issued pink slips to 100 staffers across the company, but were not
related to AOL head Tim Armstrong's broader cost-cutting initiative -- code-named "Project Everest" -- which was already expected to take effect within the next month.
Last month, news broke that AOL had hired consultants Alix Partners to orchestrate the company's broader layoffs. A knowledgeable source told The Wall Street Journal's Business Insider blog
that Alix was helping AOL with a "top to bottom" look at the company in terms of "process efficiencies, cost structure, and strategy," but had yet to come up with an exact number
Read the whole story at All Things D et al. »