Lay-offs? It must be the Holidays.

AOL to cut global work force by 20 pct

'NEW YORK—AOL is cutting its global work force by an additional 2,000 jobs as it continues a transition from Internet access provider to online advertising company.

The elimination of 20 percent of its work force comes on top of 5,000 positions cut last fall, after AOL said it would try to boost traffic to its ad-supported Web sites by giving away AOL.com e-mail accounts, software and other features once reserved for paying subscribers.

"This realignment will allow us to increase investment in high-growth areas of the company—as an example, we added hundreds of people this year through acquisitions—while scaling back in areas with less growth potential or those that aren't core to our business," AOL Chief Executive Randy Falco told employees Monday.

The cuts affect about 1,200 positions in the United States, including 750 in northern Virginia, which has long been AOL's headquarters. AOL recently announced it was moving its headquarters to New York to be closer to the media advertising industry.

Most of the U.S. employees affected were to be informed and terminated Tuesday, while reductions abroad were expected by year's end. Severance packages are to include at least four months' pay.

Last year's reductions were mostly in customer-service and marketing personnel as AOL opted to stop producing and distributing its famous trial discs aimed to luring new customers to its Internet access subscriptions. The latest cuts were expected to affect employees across the board.

In a memo to employees, obtained by The Associated Press, Falco said the cuts should strengthen AOL and its vision of building "the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience."

Last month, AOL announced that it was consolidating its advertising operations to share innovations across the company and help potential advertisers more easily buy ads across AOL properties and third-party sites that have become part of the AOL network through various acquisitions.

AOL has been counting on ad growth to offset declines in subscription revenue, which continued to plummet, as expected, following its strategy shift in August 2006. AOL had 10.9 million paying U.S. subscribers for Internet access as of June 30, a 60 percent drop from its peak of 26.7 million in September 2002.

After four quarters of at least 40 percent growth, though, AOL ad revenues increased by only 16 percent in the April-June period.

Workers at AOL's Dulles, Va., campus had speculated for weeks that big layoffs were coming. Speculation intensified last week, when workers reported seeing large pallets of empty cardboard shipping boxes arrive at an AOL warehouse, presumably for laid-off workers to empty their desks.

AOL has undergone several rounds of layoffs in recent years. Monday's announcement reflects the first major reductions since Falco took over as chief executive in November.

None of the reductions is directly related to the headquarters move from Dulles, as most of those employees already work in New York. Senior executives like Falco, meanwhile, are expected to keep offices at both locations.'