AOL has cut over 700 employees, or about 4 per cent, from its workforce of nearly 20,000, a company spokesman said Wednesday.

AOL member support staff bore the brunt of the cuts, reflecting significant declines in AOL membership. For example, as of March 31, 2005, AOL had 21.7 million US subscribers in its fee-based service, down 2.3 million from the same period in 2004 and down 4.5 million from the first quarter of 2003.

The cuts respond to AOL's "ongoing process to better align our resources and continue to respond to a changing marketplace," said AOL spokesman Nicholas Graham, reading from a prepared statement. "As a result of these structural and strategic transformations, we believe AOL to be better positioned to remain flexible and competitive in the market, thus enabling us to expand existing audiences, and reach new ones, online."

Graham declined to be more precise when asked for a specific number of layoffs.

AOL has been shifting its business strategy away from one focused on generating revenue from subscriber fees to one focused on generating revenue from online ads.

Reportedly, AOL has been in talks at different times with Google, Microsoft and Yahoo in recent weeks over those companies' reported interest to acquire all or part of AOL.