December 05, 2002, 10:37 AM — An internal meeting held with America Online Inc. (AOL) executives this week is apparently fueling long-held speculation that layoffs are looming at the struggling Internet service provider (ISP).
At the meeting Wednesday, AOL Chief Executive Officer (CEO) Jon Miller reportedly detailed his plans for shoring up the business, which included mention of "cutbacks" in strategic areas, according to a report published in the online edition of the Wall Street Journal Thursday.
The meeting was held one day after executives at AOL's parent company AOL Time Warner Inc. (AOLTW) laid out their plans for turning around the struggling Internet unit to analysts and press.
At the analyst meeting, Miller and other top executives emphasized that cost reduction was a key part of AOL's strategy going forward. Although Miller said publicly that there would be no across-the-board layoffs, he did hint that some reductions were on their way at the 18,000-person organization.
Before the analyst meeting Tuesday, AOLTW predicted a huge drop in advertising and commerce revenue for 2003. The announcement set off a double-digit decline in the company's stock price that day and since then several analyst firms have cut back the company's ratings.
According to the Journal, Miller told AOL's 250 division heads that they needed to set realistic goals for Wall Street to restore the company's credibility. The increased financial pressure is only serving to fuel rumors that layoffs are on their way.
No one from the Dulles, Virginia-based AOL was immediately available to comment on the report.
Shares of AOLTW (AOL) traded down 2.67 percent to US$13.47 in early trading Thursday.