AOL Time Warner continues to shed employees, with another round of layoffs expected this week, reports claim.
The Washington Post says that its sources hint at an "imminent" round of layoffs, AOL Time Warner has not commented on the claims.
Three per cent of AOL Time Warner's staff (2,400 people) lost their jobs when the companies merged last January. The giant concern continues to suffer from prevailing market conditions, and further staff losses are expected as it struggles to meet its financial targets for the year.
Common sense "The reports of possible AOL layoffs are widespread, and such a move would make sense given the need for AOL Time Warner to prove the financial benefits of its merger," said Steve Vonder Haar, director of media and entertainment strategies for market researcher the Yankee Group.
He added: "The soft online ad environment gives AOL less wiggle room than it might have had otherwise. They may have to look at a variety of alternatives to ensure they deliver the financial performance promised to Wall Street."
Revenue growth AOL, like most media companies, is currently experiencing a decline in revenue growth due to a worldwide advertizing slump. While the company reported a three-per cent increase in revenue for the second quarter of this year to $9.2 billion, AOL missed analysts' expectations of revenue of $9.74 billion.
Michael Kelly, AOL Time Warner's chief financial officer, predicts an annual revenue increase of 12 to 15 per cent, to $40 billion for 2001. These optimistic targets face an online advertizing market that appears unlikely to recover anytime soon. Job cuts may be the only way forward for the company, according to industry sources.
"Every company has to manage to the bottom line, and layoffs are sometimes a way for managers to get the numbers in line quickly," Vonder Haar opined.