USA Today
NEW YORK — Newly merged AOL Time Warner moved with startling swiftness yesterday to improve its financial outlook. The media and Internet giant laid off more than 2,000 employees and said it will sell or close its 130 Warner Bros. Studio Stores, which employ an additional 3,800.
The cuts do not include the 400 layoffs at CNN announced last week. The new layoffs represent about 3 percent of AOL Time Warner’s work force. The company said most are positions that were duplicated when America Online merged with Time Warner on Jan. 11.
"This is not cost-cutting for cost-cutting’s sake," spokesman Ed Adler said. "This is streamlining for efficiency."
The AOL unit, the No. 1 Internet service provider, lost 725 jobs. Warner Music lost 600. About 400 came from Time Inc., the magazine publishing arm. The Warner Bros. and New Line movie studios each lost 100. And about 100 people lost jobs at the parent company’s corporate offices.
The company bowed to reality with the decision to unload its struggling retail stores. High rent and slower-than-expected sales have plagued the effort originally trumpeted as a way for Time Warner to promote and profit from its characters, including Superman and Bugs Bunny. There are two such stores in Hawai‘i. Time Warner took a $109 million writedown on the unit in 1999.
Investors expected some belt-tightening. The company also has suffered as Wall Street soured on the prospects for Internet, technology and entertainment companies. AOL Time Warner made ambitious promises to find $1 billion in synergies and boost cash flow by 30 percent this year despite a slowdown in ad sales. Executives will probably reiterate these promises when they meet with analysts on Jan. 31.
AOL Time Warner shares have risen nearly 15 percent since the deal closed, ending yesterday at $54.15, up 31 cents.
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