AOL to Show 2,500 Employees the Door

With its Dec. 9 spinoff from Time Warner Inc. (NYSE:TWX) looming, AOL LLC wants to be slim and trim once it goes solo.

In a filing Thursday with the Securities and Exchange Commission, AOL said it has informed its workforce that it wants to cut a third, or about 2,500, of employees. The company is asking employees to step up to the chopping block on their own (and presumably receive a buyout package), saying the cuts will be "conducted on a voluntary and involuntary basis."

The move was somewhat expected, but nevertheless a certain downer for the workers at the long-struggling unit. The cuts will pare $300 million off of the company's annual operating expenses, it said. The restructuring will cost about $200 million, AOL added.

Other cuts are looming for AOL too. It has hired Morgan Stanley (NYSE:MS) and Allen & Co. to find a buyer for its ICQ instant messaging unit, according to BoomTown, and is also mulling a sale of its Mapquest business. - Olaf de Senerpont Domis