14 DAY TRIAL // There are a lot of things happening at AOL as the once mighty Internet giant is going through some pretty tough restructuring. It's about to get separated from Time Warner as an independent company listed in the stock market. It's also trying to get rid off any business not crucial to its operation. And now it's moving forward with the cost cutting plans, aka “massive firings,” which have been looming for months.
“Project Everest,” as the program has been cunningly named, involves getting rid of thousands of employees to help the company get back on track. The first sign came last week when about 100 employees were let go, but the company said it was only a matter of time until the second phase would begin. This second step would involve “voluntary” layoffs, a suggestion CEO Tim Armstrong got from the company's employees during his mythical 100 days of corporate “soul searching” when he went to visit all of the company's businesses and properties.
The suggestion seemed like a good idea so AOL is trying this first, asking for up to 2,500 employees to step down on their own accounts. The move was revealed in a regulatory SEC filing. The program will begin on December 4, just five days before spinning off from Time Warner and six days before the new AOL stock begins to trade. If the company doesn't get the required number, it will then proceed with “involuntary” cuts.
It has been known for a while that the company will have to go though some pretty deep cuts, but most estimates didn't anticipate 2,500 people. It's believed that Armstrong wants to make sure that he won't have to go through the process again so he's going as deep as possible now. AOL employs some 6,900 people all around the world. The company is expected to save up to $300 million with the move, but it will incur a one-time charge of $200 million spread out since after the spin off until the second half of 2010.