AOL Continues Push to Ad Network With 2,000 Layoffs

AOL is laying off 20-percent of its staff to move one step closer to becoming an ad-supported company. About 2,000 employees have been cut as part of the business model that would make AOL solely dependent on ad revenue.

• You're Fired: AOL's Letter to Employees (PDF File)
• AOL Wants Ad Revenue: New Ad Strategy Gives Freebies

About 1,200 of the layoffs will come from AOL's U.S. offices. Out of that 1,200, about 750 will be laid off from the company's Virginia headquarters. Last year, AOL laid off 5,000 employees to get the transition started.

While the Time Warner company's ultimate goal is to be an advertising network supported by ad dollars, right now AOL is very dependent on the subscriber fees it collects as an Internet service provider (ISP). A majority of traffic to AOL.com also comes from subscribers.

More on AOL's Transition:

Time Warner Chairman and CEO Richard Parsons has admitted the part of AOL's business that serves as an ISP may be sold off at some point. However, when he spoke at a Goldman Sachs conference, he said the ISP portion would remain part of AOL anywhere between a year and a year and a half.

Just last month, AOL launched Platform A, its single platform ad sales network. The platform includes AOL, Advertising.com, AdTech, Lightningcast, Tacoda, Third Screen Media.

AOL is serious about the transition. The company is even moving its headquarters from Dulles, Virginia, to the heart of the advertising world in New York.