AOL cuts one-third of workforce

Chief Executive Tim Armstrong told employees of the layoff plan via video and email, and said that he was going to forgo his own bonus for 2009. It is said AOL will begin its layoff plan on December 4 and run through to December 11 - beginning first in the United States before extending to the company's global operations.

Media conglomerate Time Warner Inc said on Monday it will spin off its AOL unit to shareholders on December 9, nine tumultuous years after one of the most disastrous corporate mergers in history. The spin-off is expected to effectively value AOL's market capitalization at around US$3 billion - a huge drop from US$163 billion during the merger in January 2000.

Time Warner, which owns media brands such as CNN, HBO and Warner Bros, said back in May it planned to spin off AOL as it focuses on being a content company. Last year, it spun off its cable distribution unit, Time Warner Cable Inc.

According to AOL, it would start with a volunteer buyout program and move on to involuntary layoffs if enough workers do not step up. The web pioneer, which is now focused primarily on advertising-supported content, believes the layoffs may result in restructuring charges of up to US$200 million.